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I ' m especially stuck on part b Herjavec Enterprises is thinking about introducing a new surface cleaning machine. The marketing department has come up
Im especially stuck on part b
Herjavec Enterprises is thinking about introducing a new surface cleaning machine. The marketing department has come up with the estimate that the company can sell units per year at $ net cash flow per unit for the next five years. The engineering department has come up with the estimate that developing the machine will take a $ million initial investment. The finance department has estimated that a discount rate of percent should be used.
aWhat is the basecase NPVA negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to decimal places, eg
b If unsuccessful, after the first year, the project can be dismantled and will have an aftertax salvage value of $ million. Also, after the first year, expected cash flows will be revised up to units per year or down to units with equal probability. What is the revised NPVDo not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to decimal places, eg
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