Question
1. a project will require an initial investment of $300,000 and will return $75,000 each year for eight years. if taxes are ignored and the
1. a project will require an initial investment of $300,000 and will return $75,000 each year for eight years. if taxes are ignored and the required rate of return is 9%, what is the project's net present value? Should comapny proceed with the project?
2. Products kappa and sigma are joint projects. The joint production cost of the projects is $800. Kappa has a market value of $450 at the split-off point. If kappa is further processed at an additional cost of $600, its markrt value is $1,400. Product sigma has a market value $1,150 at the splitt off point. If product sigma is further processed at an additional cost of $300, it market value is $1,400. Using relative sales value method, calculate the joint product costthat would be allocateed to kappa and sigma. How do you know if one of the products should be further processed?
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