(Write cash flow diagram if possible:) A project for a specialized product estimated to have...
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Accounting
(Write cash flow diagram if possible:)
A project for a specialized product estimated to have a short market life has the following information. Use the PW method to determine the minimum amount of equivalent uniform annual revenue required to justify the project economically.
- First cost: $1,200,000
- Cost of depreciable property: $500,000
- Property class of depreciable property: GDS 3 years
- Annual O&M costs: %600,000 on the first year, increasing at a rate of 5% per year thereafter
- Selling price of depreciable property at the end of 3 years: $300,000
- Income tax rate: 35%
- MARR after taxes: 30%
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