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Emperor’s Clothes Fashions can invest $6 million in a new plant for producing invisible makeup. The plant has an expected life of 5 years, and expected sales are 7 million jars of makeup a year. Fixed costs are $2.4 million a year, and variable costs are $1.50 per jar. The product will be priced at $2.30 per jar. The plant will be
a. What is project
b. What is NPV if variable costs turn out to be $1.60 per jar?
c. What is NPV if fixed costs turn out to be $2.2 million per year?
d. At what price per jar would project NPV equal zero?
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