Projected sales for a new PODS container follows:
Year
Unit sales
1
$1,750,000
2
2,100,000
3
2,450,000
The project will require $250,000 in net working capital to
start. Variable costs are 65% of sales, and total fixed costs are
$275,000 per year. The cost of equipment is $1,000,000. The
equipment qualifies for a CCA rate of 20 percent. The salvage value
at the end of 3 years is $450,000.
The relevant tax rate is 30 percent, and the required...