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Calculate the plants net investment

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Reference no: EM133069580

The Jacob Chemical Company is considering building a new potassium sulfate plant. The following are the cash outlays to complete the plant

Year Outlay
0 $4,000,000
1 $2,000,000
2 $500,000

Jacob's cost of capital is 12 percent, and its marginal tax rate is 40 percent.

a) Calculate the plants net investment (NINV)

b) what is the installed cost of the plant for tax purposes?

Reference no: EM133069580

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