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incremental cash flows
Essay specific features
Written by:
Rachel W
Date added:
September 15, 2014
Level:
Grade:
A
No of pages / words:
3 / 770
Was viewed:
4032 times
Rating of current essay:
Essay content:
Direct costs including labor and materials will be 55% of sales. Indirect incremental costs are estimated at $80,000 a year. The project requires a new plant that will cost a total of $1,000,000, which will be depreciated straight line over the next five years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000...
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The new line will also require an additional net investment in inventory and receivables in the amount of $200,000. Assume there is no need for additional investment in building and land for the project. The firm's marginal tax rate is 35%, and its cost of capital is 10%. Based on this information you are to complete the following tasks...
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