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ASAP please :) Thank you :) Pappy's potato has come up with a new product, the Potato Pet. Pappy's paid $430,000 for a marketing survey
ASAP please :) Thank you :)
Pappy's potato has come up with a new product, the Potato Pet. Pappy's paid $430,000 for a marketing survey to determine the viability of the product. It is estimated that Potato Pet will generate sales of $610,000 per year. The fixed costs associated with this project will be $178,000 per year and variable costs will amount to 30% of sales. The equipment will cost $600,000 and be depreciated in a straight-line manner for the four years of the project life. It can be sold for $20,000 at the end of the project. The initial net operating working capital is $40,000 and will increase by $10,000 each year until the end of the project. Pappy's is paying a 25% tax rate and has a required rate of return of 5%. The NPV of this project is s (Relevant cash flows) Winnegagel Corp currently sells 19,000 motor homes per year at $80,000 each, and 16,000 luxury motor coaches per year at $100,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 22,000 of these campers per year at $40,000 each. An independent consultant has determined that it Winnegagel introduces the new campers, it should boost the sales of its existing motor homes by 1,000 units per year, and reduce the sales of its motor coaches by 500 units per year. When evaluating this project, the amount to use as the annual sales figure is $ million (Relevant cash flows) Kenny, Inc is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $6.3 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $5.2 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $2.1 million to build, and the site requires $500,000 worth of grading before it is suitable for construction. When evaluating this project, the proper cash flow amount to use as the initial investment in fixed assets is $ million Step by Step Solution
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