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Your firm is planning a major capital expansion. You plan to invest $1,000,000 initially, using cash on hand, all of which is depreciable over 5 years using straight-line depreciation. The company should receive $600,000 annually in revenues while incurring $250,000 in operating expenses. The equipment should be salvageable after 5 years for $250,000. The MARR for this project is 20%. Develop a net cash flow schedule using a marginal tax rate of 34%. Do not adjust income and expenses for inflation. After determining the NPV, conduct a sensitivity analysis of MARR.
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