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Pappy s Potato has come up with a new product, the Potato Pet. Pappy s paid $ 8 0 , 0 0 0 for a
Pappys Potato has come up with a new product, the Potato Pet. Pappys paid $ for a marketing survey to determine the viability of the product. It is estimated that Potato Pet will generate sales of $ per year. The fixed costs associated with this project will be $ per year and variable costs will amount to of sales. The equipment will cost $ and be depreciated in a straightline manner for the four years of the project life. It can be sold for $ at the end of the project. The initial net operating working capital is $ and will increase by $ each year until the end of the project. Pappys is paying a tax rate and has a required rate of return of The NPV of this project is $
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