Q1. Below is the projected financial information provided by Altaf Hussain Manufacturing LLC. The company wants to introduce two new products into the market, Zandu and Fundu. The company provides the following forecasted information of sales and costs.

Sales in Units
Product/Year	Year 1	Year 2	Year 3	Year 4
Zandu	60,000	110,000	100,000	30,000
Fandu	75,000	137,000	125,000	37,500

Product	Zandu	Fandu
Direct Material Costs	14	11
Selling Price	31	23

Selling Price Inflation (Per Year)	3%
Direct Material Cost Inflation (Per Year)	3%

Investment	1,000,000
Machinery	1,000,000
Fixed Costs	1,000,000
Tax	25%
Residual Value	1.2 million

Required:

Calculate NPV and IRR of this Project / Proposal

Hint:

1. Calculate expected Revenue
2. Expected costs
3. Expected cashflows

To calculate NPV and IRR