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A compaery that manulactures recreational pedal bouts has approached Richard Cichanowisi to ask it he would be interested in using Current Design rotomold expertine and

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A compaery that manulactures recreational pedal bouts has approached Richard Cichanowisi to ask it he would be interested in using Current Design rotomold expertine and equigiena to produce some of the pedal bout components Richard is intrigued by the idea and thinks it would be an interesting way of complementing the prevent oroduct ine. One of Richards hestations about the proposal is that the pedal boats are a daterent shepe than the kayaks that Current Designs produces As a result the comcany would heed to buy an this is a new venture, Richard thinks that a 12% discount rate is appeopriate to use to evaluate the project. As ac intem at Current Desiger. Fichurd has asked you to prepare an initial evaluation of this proposa. lo. - in your analyas, he has provided the fallowine information and assungeions. 1. The new rotomold oven will have a cont of $290000, a salvate value of $0, and an 8 vear useful the. Straight line depreciation wili 6 ike iked 2. The projected revenuts, costs, and remults for each of the 8 years of this project are as follows. decimal places es. 125. For caiculation purposes, use 5 decimal ploces as dlsplayed in the facior toble rrovided) Net present value Should the oroposal be accepted uting this diccount rate? the oroposal

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