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help on this one please? time cash flow and annual OCF Pappy's Potato has come up with a new product, the Potato Pet (they are
help on this one please? time cash flow and annual OCF
Pappy's Potato has come up with a new product, the Potato Pet (they are freeze-dried to Iast longer). Pappy's poid $170,000 for a marketing survey to determine the viability of the product. It is felt that Fotato Pet will generate sales of $885,000 per year. The fioed coste associated with this will be $224,000 per year, and variable costs will amourt to 20 percent of sales. The equipment necessary for production of the Potato Pet will cost $950,000 and will be deprecioted in o stroight-line manner for the four yeors of the product life (os with oll fads, it is felt the sales will end quickly). This is the only initial cost for the production. Poppy's has a tax rate of 25 percent and a required return of 14 percent. Calculate the Time 0 cash flow for this project. (A negattve answer should be inclicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g. 32) Calculste the onnual OCF for this project. (Do not round Intermediate calculations and round your answer to the nearest whole number, e.g. 32) Colculote the poybsck period for this project. (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g. 3216.) Step by Step Solution
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