Question
A sports company is starting a new investment to produce a new sport ball. The required machine for this project costs $263,500 . The machine
A sports company is starting a new investment to produce a new sport ball. The required machine for this project costs $263,500 . The machine will be fully depreciated by the straight-line method over its 4 year economic life. Each ball sells $22. The variable cost per each ball is $9, and fixed costs is $103,000 each year. The estimated sales will be 19500 units per year. Firm's corporate tax rate is 40%. The discount rate is 15% for this project. Ignore salvage value and working capital changes,
what is annual operating cash flow $ (Round to WHOLE Dollar)?
What is net present value of this investment $ (Round to WHOLE Dollar) ? I
f sale demand increases by 500 unit, what is new operating cash flow $ (Round to WHOLE Dollar) ?
What is new NPV $ (Round to WHOLE Dollar) ? Calculate the sensitivity of NPV against unit sales demand (Keep TWO Decimals for Sensitivity Ratio)
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