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Purchase price 1,500,000 0 1 2 3 4 Shipping and installation 50,000 Outlay (1,550,000) Useful life 4 Revenue 990,000 1,014,750 1,040,119 1,066,122 Salvage value 90,000
Purchase price | 1,500,000 | 0 | 1 | 2 | 3 | 4 | ||
Shipping and installation | 50,000 | Outlay | (1,550,000) | |||||
Useful life | 4 | Revenue | 990,000 | 1,014,750 | 1,040,119 | 1,066,122 | ||
Salvage value | 90,000 | Supply cost | 270,000 | 276,750 | 283,669 | 290,760 | ||
Volume | 6,000 | Labor cost | 225,000 | 230,625 | 236,391 | 242,300 | ||
Revenue per scan | 165 | Salvage value | 90,000 | |||||
Supply cost per scan | 45 | (1,550,000) | 495,000 | 507,375 | 520,059 | 623,061 | 287,793 | |
Labor cost | 225,000 | |||||||
Inflation | 2.50% | |||||||
Corporate cost of capital | 6.25% |
What is the expected NPV for the below projects based on scenario analysis?
Revenue | Supply cost | |||
Scenarios | Volume | per scan | per scan | NPV |
Good (35% chance) | 6,000 | 165 | 45 | |
Great (25% chance) | 6,800 | 200 | 35 |
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