One estimates that their products can be sold for an average price of $50 per...
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One estimates that their products can be sold for an average price of $ per unit, and the company analysts expect that the firm can sell units per year at this price for a period of five years.This companys management has determined that it will be possible to reduce the variable cost per unit down to $ per unit by purchasing an additional option for the equipment that will raise its initial cost to $ million the residual or salvage value for this configuration is estimated to be $ The cash fixed cost per year is $ In addition, the firm expects to have to invest an additional $ in working capital to support the new business. The tax rate is and the discount rate is Calculate IRR for the above scenario
One estimates that their products can be sold for an average price of $ per unit, and the company analysts expect that the firm can sell units per year at this price for a period of five years.This companys management has determined that it will be possible to reduce the variable cost per unit down to $ per unit by purchasing an additional option for the equipment that will raise its initial cost to $ million the residual or salvage value for this configuration is estimated to be $ The cash fixed cost per year is $ In addition, the firm expects to have to invest an additional $ in working capital to support the new business. The tax rate is and the discount rate is
Calculate IRR for the above scenario
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