4. What is the NPV of the project? Jamberoo Republic Electronics is a midsized electronics manufacturer located in southern New South Wales. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances.

Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company’s finance department.

One of the major revenue-producing items manufactured by Jamberoo Republic is a smartphone. Jamberoo Republic currently has one smartphone model on the market, and sales have been excellent. The smartphone is a unique item in that it comes in a variety of coastal colours and is preprogrammed to play Jimmy Barnes music. However, as with any electronic item, technology changes rapidly and the current smartphone has limited features in comparison with newer models. Jamberoo Republic spent $750 000 to develop a prototype for a new smartphone that has all the features of the existing smartphone but adds new features such as WiFi tethering. The company has spent a further $200 000 for a marketing study to determine the expected sales figures for the new smartphone.