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Power Pointer Inc is considering the development of a presentation projector device. The sales forecast for this device is 40,000 units per year. Power Pointer
Power Pointer Inc is considering the development of a presentation projector device. The sales forecast for this device is 40,000 units per year. Power Pointer expects the product will have a three-year life and a wholesale price of $500 and production cost of $250 per unit. Power Pointer will need to purchase a new piece of equipment for $15 million of new equipment for this project. The equipment will be depreciated using the straight-line method over a 3-year life. Power Pointer's marginal tax rate is 35%. Find the NPV for this project, and decide whether Power Pointer should accept this project
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