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Question 3 Anmol pens is planning to introduce a new product Lik Karo Pens Expected sale units (in 000s) and other information are given below
Question 3 Anmol pens is planning to introduce a new product Lik Karo Pens" Expected sale units (in 000s) and other information are given below for the next 5 years Year 1 2 3 4 5 Sales Units (in 000s) 1,000 1,200 1,500 1,400 1,300 Sale Price 9 9 10 10 10 Variable Cost 6 5.5 5 5 5 General, Selling & Admin expenses relating to this product is estimated at 12.00,000 in Year 1 and expected to grow at 10% per annum till the life of the product Working Capital is required at 15% of the Sales and will be recovered at the end of the product life Cost of the machines required is? 2.00 Crores Income tax allowable depreciation is 20% on Written Down Value method & Income Tax Rate is 30%. Whether the project can be accepted at the discount rate of 12%
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