3.Tiong Nam Products is considering a new project to expand their business. Information to develop...
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3.Tiong Nam Products is considering a new project to expand their business. Information to develop the project evaluation worksheet is provided below for the top management decision. Net Operating Working Capital (NOWC) = represents 12% of projected (Next Year) sales Sales and cost forecast: Annual sales (units) :1,250 units (during the project's life) Unit sales price ( Year 1):$200 per unit* Unit cost price (Year 1) : $100 per unit* Unit sales price and unit cost price increase annually at 3% Tax rate: 40% Project's required rate of return =10% Depreciation method - MACRS using 3-year asset class: Depreciation rates - Year 1=33%; Year 2=45%; Year 3=15%;; Year 4=7%
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