Revision 2 – Investment Appraisal

4. Fixed overhead costs: $500,000/year (current price terms), fixed cost inflation is 6% per year. 5. $200,000/year of the fixed costs are development costs that have already been incurred and are being recovered by an annual charge to the project. 6. Investment financing is by a $2 million loan at a fixed interest rate of 10% per year. 7. ................
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