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The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years.The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0.
The cane manufacturing machine will result in sales of 2000 canes in year 1.Sales are estimated to grow by 10% per year each year through year three.The price per cane that Sisyphean will charge its customers is $18 each and is to remain constant.The canes have a manufacturing cost of $9 each.
Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts.It is estimated that the Sisyphean Corporation needs to hold 2% of its annual sales in cash,4% of its annual sales in accounts receivable,9% of its annual sales in inventory,and 6% of its annual sales in accounts payable.The firm is in the 21% tax bracket,and has a cost of capital of 10%.
-The incremental unlevered net income in the first year for the Sisyphean Corporation's project is closest to:
Focal-Point Review
A performance review method focusing on significant achievements and critical areas for improvement in an employee's performance over a specific period.
Performance Appraisal
A systematic evaluation of employees' job performance and productivity to understand their abilities for further growth and development within the organization.
Purchasing Agent
A professional responsible for acquiring goods or services for their employer to use or sell.
Organizational Citizenship
The voluntary commitment of employees to go beyond their contractual tasks and roles, contributing to the overall effectiveness and culture of the organization.
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