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Company is considering a project producing a new product, and the project will last for 1 0 years. The company expects to sell 1 0
Company is considering a project producing a new product, and the project will last for years. The company expects to sell units in the first year then increasing by each year. the selling price for the product will be $ per unit at the first year, then reducing by each year. The variable cost is $ per unit at the first year, increasing by each year. The fixed cost is $ at the first year, increasing by each year. Assume all the above cash flows occur at the end of the year. The initial investment is $ and there will be no salvage value at the end of year the tax rate is and the cost of capital is The initial outlay will be depreciated by using the straightline method.
A compute the NPV of this project.
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