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Business, 08.11.2019 07:31 shiiIjustneedananswe

Texmex food company is considering a new salsa whose data are shown below. the equipment to be used would be depreciated by the straight-line method over its 3-year life and would have a zero salvage value, and no change in net operating working capital would be required. revenues and other operating costs are expected to be constant over the project's 3-year life. however, this project would compete with other texmex products and would reduce their pre-tax annual cash flows. what is the project's npv? (hint: cash flows are constant in years 1-3.)wacc 10.0%pre-tax cash flow reduction for other products (cannibalization) -$5,000investment cost (depreciable basis) $80,000straight-line depreciation rate 33.333%annual sales revenues $67,500annual operating costs (excl. depreciation) -$25,000tax rate 35.0%a. $3,636b. $3,828c. $4,019d. $4,220e. $4,431

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