and combo Google Scholar 10quivo do art... Gmail YOUTUDE Maps or open 3 Question 1 Not yet answered Marked out of 80,00 P Flag question Ashmore plc is a very successful specialty food producer. It is considering the introduction of a new product to add to its existing range. It has carried out a feasibility study and this indicates that the product will have a life of four years when production will then cease. The study cost 175,000. You have ascertained the following Ashmore plc carried out market research which indicated the following Year 1 2 3 4 20 20 20 18 Sales - units 1.Om 1.0m, 1.0m 0,5m Selling Price (6) The cost of the research was 75,000 and this will be paid to the consultants at the end of the first year of the project The production manager has confirmed that materials to produce each unit will cost 10. It is estimated that it will take half of an hour tabour to manufacture each unit. Production staff are paid at an average rate of E12 per hour. Variable overheads are estimated at 2 per unit New plant and machinery costing 3.0m will be required at the start of the project. Ashmore pic has a policy of depreciating plant and machinery in its accounts at 25% of cost per annum on a straight line basis. The plant and machinery is expected to have scrap value of 500,000 at the end of the project A marketing campaign will be undertaken and a total budget of 2.4 million has been approved. This will be spent in equal instalments over the first three years of the project. No marketing will take place in the final year of the product Working capital of 400,000 will be required at the same time as the plant and machinery is purchased Existing fixed overheads of Ashmore ple amounting to 120,000 per annum will be reallocated to the new product it can be assumed that cash flows occur at year-end, unless otherwise stated, Ashmore's cost of capital is 10%. Taxation may be ignored. 30 Working capital of 400,000 will be required at the same time as the plant and machinery is purchased. Existing fixed overheads of Ashmore plc amounting to 120,000 per annum will be reallocated to the new product. It can be assumed that cash flows occur at year-end, unless otherwise stated. Ashmore's cost of capital is 10% Taxation may be ignored REQUIREMENT: Using the excel template answer the following questions on excel Calculate the Net Present Value (NPV) of the new project (70 marks) Calculate the internal Rate of Return (IRR) of the new project. (10 marks) Maximum let 10. maximum number of his es You can drag and drop file here to them Next page FX in class notes Jump to CA EXCEL: Template