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A company is launching on the market a new innovative product. The variable unit costs are 15 /unit; while the cost for the equipment used

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A company is launching on the market a new innovative product. The variable unit costs are 15 /unit; while the cost for the equipment used to produce the product is 40,000 . The sales forecasts are reported in the table below. Year 1 1200 units Year 2 2000 units Year 3 1500 units Year 4 1300 units Questions: 1. Please determine the sales price considering that the company wants a gross return rate (without considering taxes advantages) equal to the Return on Investment (ROI) ratio, i.e., 12%. 2. Let us assume that the sales price is 30 /unit, please calculate the net present value (NPV) of the investment (without considering taxation). 2. Let us assume that the sales price is 30 /unit, please calculate the percentage net profitability (internal rate of return - IRR) (taxes are 40% of profits. constant depreciation of equipment in the 4 years). A company is launching on the market a new innovative product. The variable unit costs are 15 /unit; while the cost for the equipment used to produce the product is 40,000 . The sales forecasts are reported in the table below. Year 1 1200 units Year 2 2000 units Year 3 1500 units Year 4 1300 units Questions: 1. Please determine the sales price considering that the company wants a gross return rate (without considering taxes advantages) equal to the Return on Investment (ROI) ratio, i.e., 12%. 2. Let us assume that the sales price is 30 /unit, please calculate the net present value (NPV) of the investment (without considering taxation). 2. Let us assume that the sales price is 30 /unit, please calculate the percentage net profitability (internal rate of return - IRR) (taxes are 40% of profits. constant depreciation of equipment in the 4 years)

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