A 6-year project requires an initial investment of $200,000 in fixed assets. The fixed assets...
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A 6-year project requires an initial investment of $200,000 in fixed assets. The fixed assets can be depreciated according to CCA at 30%, and are expected to have $30,000 of salvage value in six years. Fixed costs are $8,000 per year, variable costs are $15 each and the annual unite sales are expected to be 20,000. The tax rate is 40%. The required return on the project is 12%. What must be the unit price for the investment to be worthwhile?
A 6-year project requires an initial investment of $200,000 in fixed assets. The fixed assets can be depreciated according to CCA at 30%, and are expected to have $30,000 of salvage value in six years. Fixed costs are $8,000 per year, variable costs are $15 each and the annual unite sales are expected to be 20,000. The tax rate is 40%. The required return on the project is 12%. What must be the unit price for the investment to be worthwhile?
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