You are considering a capital budgeting proposal to make glow-in-the-dark pacifiers for anxious first time parents. You estimate that the equipment to make the pacifiers would cost you $100,000 (which you can depreciate as a 3-year property (MACRS) for tax purposes) and that you can sell 30,000 units a year at $1.50 a unit. The cost of making each pacifier would be $0.60, and the tax rate you would face would be 40%. You also estimate that you will need to invest 30% of first year revenues in working capital at the start of the project and that you can salvage 80% of this working capital at the termination of the project in year 5.
https://uniessaywriters.com/wp-content/uploads/2020/07/LOG-300x75.png 0 0 developer https://uniessaywriters.com/wp-content/uploads/2020/07/LOG-300x75.png developer2020-08-12 23:29:012020-08-12 23:29:01You are considering a capital budgeting proposal to make glow-in-the-dark pacifiers for anxious first time parents.