Find what is the rate of interest on borrowed funds

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Assume I sell rubber garden hoses. I sell my hoses for $10 each and expect to sell 100,000/year for the next three years. My fixed costs are $185,000 and my variable costs are expected to be $650,000, 690,000 and 750,000 in each of the next 3 years. Assume rubber hoses will be outlawed in 3 years due to water scarcity and watering regulations. My rate of interest on borrowed funds is 7.5%. What's the cash value of the firm if I want to sell it today?

Reference no: EM13239959

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