Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a slime business where you will sell 300 units of slime annually at a price of $5 each for 3 years, at which point

Consider a slime business where you will sell 300 units of slime annually at a price of $5 each for 3 years, at which point you will be a teenager and no longer interested in slime. It costs $2.5 to produce each unit. Your only equipment is a $1,200 mixer, which you depreciate straight line to 0 over 3 years. You believe you can sell the used mixer for $100 in three years. You need $250 in start-up inventory of glue and containers. Your tax rate is 15%. What are the cash flows from this project? If your required rate of return is 12%, can you get your parents to invest in your business? Show the project cash flows, the NPV and IRR.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Behavioral Finance And Capital Markets

Authors: A. Szyszka

5th Edition

1137338741, 9781137338747

More Books

Students also viewed these Finance questions

Question

What is meant by planning or define planning?

Answered: 1 week ago

Question

Define span of management or define span of control ?

Answered: 1 week ago

Question

What is meant by formal organisation ?

Answered: 1 week ago

Question

What is meant by staff authority ?

Answered: 1 week ago

Question

c. Acafeteriawhere healthy, nutritionally balanced foods are served

Answered: 1 week ago