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Unformatted text preview: 8% 8.77% 3.30 $1.61 9.28% 9.17% 3.30 $-4.03 9.28% 9.57% 3.30 $-9.47 9.28% 9.98% 3.30 $-14.72 9.28% 10.38% 3.30 $-19.79 9.28% 10.79% 3.30 Change Sales Salvage WACC $ 60.00 $ 40.00 $ 20.00 $-30% $ -20.00 -20% -10% 0% 10% 20% 30% $ -40.00 $ -60.00 Change -30% -20% -10% 0% 10% 20% 30% Sales $70.00 $80.00 $90.00 $100.00 $110.00 $120.00 $130.00 Salvage $17.50 $20.00 $22.50 $25.00 $27.50 $30.00 $32.50 WACC 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% S ales Salvage WACC -30% $-49.68 $-7.10 $13.51 -20% $-34.46 $-6.08 $7.45 -10% $-19.25 $-5.05 $1.61 0% $-4.03 $-4.03 $-4.03 10% $11.19 $-3.01 $-9.47 20% $26.40 $-1.98 $-14.72 30% $41.62 $-0.96 $-19.79 WACC = t CF A CF B 10% 0 $(50,000) $(50,000) 1 $17,500 $34,000 2 $17,500 $(22,500) 1) NPV(A) = NPV (B) = $5,472.65 $6,641.62 - higher NPV 2) EAA (B) = $2,095.24 3 $17,500 $34,000 4 $17,500 $27,500 Allied's Lemon Juice Project (in Thousands) Inflation rate 5% End of Year 0 I. Investment Outlays Equipment cost $-200.00 Installation $-40.00 CAPEX $-240.00 Increase...
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