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California State University Operations And Supply Chain Management Assignment Help - Finance NPV/OCF


Question - 17. value:
5.00 points
Consider a project to supply Detroit with 25,000 tons of machine screws annually for automobile
production. You will need an initial $2,200,000 investment in threading equipment to get the project
started; the project will last for five years. The accounting department estimates that annual fixed
costs will be $700,000 and that variable costs should be $400 per ton; accounting will depreciate the
initial fixed asset investment straight-line to zero over the five-year project life. It also estimates a
salvage value of $300,000 after dismantling costs. The marketing department estimates that the
automakers will let the contract at a selling price of $480 per ton. The engineering department
estimates you will ne ...Read More

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