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NoRoni corp masks sells recyclable high quality personal protective equipment that will be sold for $55...
NoRoni corp masks sells recyclable high quality personal protective equipment that will be sold for $55 each to all hospitals across Canada. Non-depreciated fixed costs are $100000 per year and variable costs are $50 per unit. Initial investment to manufacture the project is $500,000. The tax rate is 20% and the opportunity cost of capital is 8%. The project is expected to last 3 years and the machinery is expected to be worth 200,000 at the end of the 3 years.
a. What is the NPV breakeven number of units to be sold each year? Assume straight line depreciation.
b. If the maximum production capacity is 50,000 units a year, how much subsidy should the government give NoRoni corp every year to break even on an NPV basis?
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jeff jeffy answered 2 years agoRelated Solutions
NoRoni corp masks sells recyclable high quality personal protective equipment that will be sold for $55...
NoRoni corp masks sells recyclable high quality personal
protective equipment that will be sold for $55 each to all
hospitals across Canada. Non-depreciated fixed costs are $100000
per year and variable costs are $50 per unit. Initial investment to
manufacture the project is $500,000. The tax rate is 20% and the
opportunity cost of capital is 8%. The project is expected to last
3 years and the machinery is expected to be worth 200,000 at the
end of the 3...
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