Chec 8 Revenues generated by a new fad product are forecast as follows: 1 points Year 1 2 3 Revenues $44,000 30,000 20,000 10,000 Thereafter Book Expenses are expected to be 50% of revenues, and working capital required in each year is expected to be 20% of revenues in the following year. The product requires an immediate investment of $48,000 in plant and equipment. Required: a. What is the initial Investment in the product? Remember wyrking capital, b. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation and the firm's tax rate is 40% what are the project cash flows in each year? Assume the plant and equipment are worthless at the end of 4 years. c. If the opportunity cost of capital is 15% what is the project's NPV? d. What is project IRR? Complete this question by entering your answers in the tabs below. Req Reg Reg C and D What is the initial investment in the product? Remember working capital ReqB > Check 8 Revenues generated by a new fed product are forecast as follows: Year avenues 1 544,000 2 30,000 3 20,000 4 10,000 Thereafter 1 points Bool Expenses are expected to be 50% of revenues, and working capital requited in each year is expected to be 20% of revenues in the following year. The product requires an immediate investment of $48,000 in plant and equipment Required: a. What is the initial investment in the product? Remember working capital b. If the plant and equipment are depreciated over 4 years to a salvage value of zero uslog straight-line depreciationand the firm's tax rate is 40%, what are the project cash flows in each year? Assume the plant and equipment are worthless at the end of 4 years c. If the opportunity cost of capital is 15% what is the project's NPV? d. What is project IRR? Complete this question by entering your answers in the tabs below. RA Rego ReqC and D If the plant and equipment are deprecated over 4 years to a salvage value of zero using straight line depreciation, and the firms tax rate is 40%, what are the project cash flows in each year? Assume the plant and equipment are worthless at the end of 4 years. (Do not round intermediate calculation) Year Cash Flow 1 2 4 Check 8. Revenues generated by a new fad product are forecast as follows: Year 1 2 3 Revenues 344.000 30,000 20,000 10,000 1 points Thereafter elok Print Expenses are expected to be 50% of revenues, and working capital required in each year is expected to be 20% of revenues in the following year. The product requires an immediate investment of $48,000 in plant and equipment. Required: a. What is the initial Investment in the product? Remember working capital b. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight line depreciation, and the firm's tax rate is 40%, what are the project cash flows in each year? Assume the plant and equipment are worthless at the end of 4 years c. If the opportunity cost of capital is 15%, what is the project's NPV? d. What is project IRR? Complete this question by entering your answers in the tabs below. Re A Req Regaid c. If the opportunity cost of capital is 15%, what is the project's NPV? (A negative value should be indicated by a minus Do not round intermediate calculations, Round your answer to 2 decimal places.) d. What is project IRRY (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places NPV IRR d
