Increase output after project has been implemented

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Reference no: EM131896684

1. Ignoring the option to wait: ignores the ability of a manager to increase output after a project has been implemented.

may underestimate the net present value of a project.

ignores the value of discontinuing a project early.

is the same as ignoring all strategic options.

may overestimate the internal rate of return on a project.

2. Newton Industries is considering a project and has developed the following estimates: unit sales = 4,800, price per unit = $67, variable cost per unit = $42, annual fixed costs = $11,900. The depreciation is $14,700 a year and the tax rate is 34 percent. What effect would an increase of $1 in the selling price have on the operating cash flow?

$82,368 $4,823 $1 $3,168 $83,448

Reference no: EM131896684

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