Whar are the annual depreciation charges

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An finance analyst, you must evaluate a proposed project to produce printer cartridges. The equipment would cost $55,000, plus 10,000 for installation.Annual sales would be 4,000 units at a price of $50 per cartridge, and the prjects life would be 3 years. Current assets would increase by $5,000 and payables by $3,00. At the end of 3 years, the equipment could be sold for $10,000. Depreciation would be based on the MACRS 3 years class; so the applicable rates would be 33%, 45%, 15%, and 7%. Variable cost would be 70% of sales revenue, fixed cost excludig depreciation would be $30,000 per year. the marginal tax rate is 40%. the corporate WACC is 11%. What is the required investment, theyear 0 project cash flow? whar are the annual depreciation charges? what are the prjects annual net cash flows? what is the NPV? what is the IRR? would you accept the project?

Reference no: EM13288140

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