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Nacirema Desserts Inc. has developed a new ice cream machine, the Coldplay Shiver, that is rarely out of service ( unlike the one at your
Nacirema Desserts Inc. has developed a new ice cream machine, the Coldplay Shiver, that is rarely out of service unlike the one at your favourite local burger joint Naciremas finance department believes that demand will be strong for the new machine, so they are working on a feasibility study. To manufacture an initial run of this machine, the firm will invest $ for manufacturing equipment, which should last six years, with straightline depreciation and no salvage value. The tax rate would be The initial selling price for a Coldplay Shiver is expected to be $ Expected variable cost per Shiver is $ Expected fixed costs, such as rent, utilities, and salaries, but excluding taxdeductible depreciation expense, would be $ per year.Address the following questions independently from one another. Refer to the original information given in the paragraphs above to answer each..eAssuming you could sell Shivers per year, what would be your internal rate of return IRR marksfAssuming you could sell Shivers per year, what would your selling price have to be to generate a net present value of $ at a discount rate? marksgIf you could sell Shivers in the first year and your sales volume increased by each year until the end of Year six, what would the net present value be at a discount rate? markshConsidering your answers to the previous questions, is this project an acceptable investment? Explain why.
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