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A company is evaluating a new product proposal that will last 6 years. The initial outlay is $2 million. The proposed product selling price is
A company is evaluating a new product proposal that will last 6 years. The initial outlay is $2 million. The proposed product selling price is $220 per unit and the variable costs are $55 per unit and sales are planned to be 2,750 units each year. The incremental cash fixed costs for the product will be $3,750 per annum. What is the NPV of this project if the cost of capital is 10% ? (use annuity table) a. $40,250 b. $190,600 c. $190,600 d. $40,250
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