Answered step by step
Verified Expert Solution
Question
1 Approved Answer
b. What annual cash flow needs to be recouped once the product line is launched? Again, express your answer to the nearest dollar without a
b. What annual cash flow needs to be "recouped" once the product line is launched? Again, express your answer to the nearest dollar without a dollar sign. You answer should be a positive number. Question 18 1 pts c. How many units per year does your company need to sell in order for the the product line to generate its required return? Express your answer to the nearest whole number. You are evaluating the launch of a new product line. To prepare to go to market, your company will need to spend $250,000 for each of the next three years. You should assume this investment will occur at the end of each of the next three years. In addition, your company will need to spend another $500,000 at the end of the third year (just once, at the end of the third year). Once the product line is launched, your company expects to sell the same number of products, and at the same unit economics for the next 18 years (so years four through 21). The company expects to generate $50 of cash flow per unit sold. Given the risk of the new product line, your company expects to earn a rate of return of 12.5%. Please use this information to answer questions 16 - 19. a. What is the total future value of the investment that needs to be "recouped" at the end of the third year? Express your answer to the nearest dollar without a dollar sign. Your answer should be a positive number
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started