existing product higher 1.750

1. If you were a consultant for PT. XYZ is considering an investment project for a new product line. The company owns a plot of land that was purchased 3 years ago for IDR 10 billion which is planned for the disposal of toxic waste. However, recently the company has contracted with another company to handle the disposal of the toxic waste. Based on the appraisal recently carried out, it is currently estimated that the land can be sold for Rp 9 billion, net after tax. If sold four years from now, the land is estimated to be worth IDR 12 billion, net after tax. PT.XYZ has also used a marketing management consultant to analyze the prospects for the new product line by paying a fee of IDR 250 million. One of the conclusions in the consultant's report states that this industry will experience rapid growth in the next 4 (four) years. With a well-known brand from PT.XYZ, it is estimated that the company will be able to sell 6,700, 7,500,9,100 and 6,200 units of this product each year for the next four years. Once again under the name PT.XYZ which is already well-known in the market, this product will be able to be sold at a price of IDR 1,750 higher than the product model it is replacing. However, because this product is very influenced by fashion, the company plans to stop production of this model 4 (four) years later. The company's management estimates the project's fixed costs at IDR 3.5 billion per year, and variable costs at 15 percent of sales. Investment in this project will cost Rp. 31 billion and will be depreciated on a straight-line basis over 4 years. At the end of the project period, the project is estimated to have a residual value of IDR 3 billion. The working capital that is immediately needed is IDR 1.2 billion. PT.XYZ pays corporate income tax of 25%, and required capital costs of 13%. How do you recommend that as a consultant to company management, using the net present value (NPV) criteria of this project? D. Focus 1. If you were a consultant for PT. XYZ is considering an investment project for a new product line. The company owns a plot of land that was purchased 3 years ago for IDR 10 billion which is planned for the disposal of toxic waste. However, recently the company has contracted with another company to handle the disposal of the toxic waste. Based on the appraisal recently carried out, it is currently estimated that the land can be sold for Rp 9 billion, net after tax. If sold four years from now, the land is estimated to be worth IDR 12 billion, net after tax. PT.XYZ has also used a marketing management consultant to analyze the prospects for the new product line by paying a fee of IDR 250 million. One of the conclusions in the consultant's report states that this industry will experience rapid growth in the next 4 (four) years. With a well-known brand from PT.XYZ, it is estimated that the company will be able to sell 6,700, 7,500,9,100 and 6,200 units of this product each year for the next four years. Once again under the name PT.XYZ which is already well-known in the market, this product will be able to be sold at a price of IDR 1,750 higher than the product model it is replacing. However, because this product is very influenced by fashion, the company plans to stop production of this model 4 (four) years later. The company's management estimates the project's fixed costs at IDR 3.5 billion per year, and variable costs at 15 percent of sales. Investment in this project will cost Rp. 31 billion and will be depreciated on a straight-line basis over 4 years. At the end of the project period, the project is estimated to have a residual value of IDR 3 billion. The working capital that is immediately needed is IDR 1.2 billion. PT.XYZ pays corporate income tax of 25%, and required capital costs of 13%. How do you recommend that as a consultant to company management, using the net present value (NPV) criteria of this project? D. Focus