A firm is analyzing the potential purchase of a scanner for


A firm is analyzing the potential purchase of a scanner for $2, 800 that will be depredated straight-line to zero over the 7-year life of the project. The resale value of the scanner will be zero at the end of the project. Each year, the scanner will result in 240 units sold at a price of $ 16 per unit with variable cost per unit of $9 and fixed cost of $600. The firm has other profitable opportunities sufficient to cover any losses. The lax rate is 30%. The required return is 12%. Find the cash flow from assets in year 7 and the sensitivity of net present value to changes in the variable cost per unit.

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Financial Management: A firm is analyzing the potential purchase of a scanner for
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