Question
Preparing capital budgeting i need to prepare a capital-budgeting analysis. here are the optimistic and pessimistic amounts for a period of 5 years the amounts
Preparing capital budgeting
i need to prepare a capital-budgeting analysis. here are the optimistic and pessimistic amounts for a period of 5 years the amounts are as follows: $1,800,000, 3,800,000, 5,200,000, 8,200,000, 10,200,000 and now the pessimistic amounts: $1,000,000, 1,400,000, 1,200,000, 1,000,000, 600,000. This analysis must include a predicted rate of return at 16%, the contribution margin, initial investment of $3,000,000 for production facilities, $2.5 million for advertising and other product introduction expenses, and $1.5 million for working capital, and the production facilities will have a value of $800,000 after five years. I then need to know if this company should launch the product or not and I have to give an explanation as to why or why not.
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