Four-year economic life and residual value

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A company plans to buy a machine worth $ 300 million with a 4-year economic life and residual value of $ 20 million. But at the end of its economic life the machine is estimated to be sold at $ 17 million. For the operation of the machine required working capital of $ 15 million which is issued only once , its when the beginning of the operation of the machine. Variable cost per year is estimated at $ 600 million, while the fixed cost per year beyond the cost of depreciation of $ 500 million. the annual sales level is estimated in the equal amount and value for 4 years. if known NPV company $ 1000 million, 25% and desired return 20%, then what is the company's sales rate per year?

Reference no: EM131856833

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