Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Complete the following problem and upload the Excel file of your solution to Canvas . For a new product, sales volume in the first year
Complete the following problem and upload the Excel file of your solution to Canvas.
For a new product, sales volume in the first year is estimated to be 100,000 units and is projected to grow at a rate of 7% per year. The selling price is $10, the per-unit variable cost is $3, and the annual fixed cost is $200,000.
- Develop a spreadsheet model to calculate the net present value (NPV) of profit over a three-year period, assuming a 7% discount rate.
- If the first year sales follows a normal distribution with mean of $100,000 and standard deviation of $50,000, and the annual fixed cost follows a uniform distribution between $150,000 and $250,000, what is the risk that the NPV over the three years will not exceed $300,000? (Simulate for a 1000 trials)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started