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Sentax Corporation is an international manufacturer of fragrances for women. Management at men's fragrances. From the best estimates of the Sentax is considering expanding the
Sentax Corporation is an international manufacturer of fragrances for women. Management at men's fragrances. From the best estimates of the Sentax is considering expanding the product line to marketing and production managers, annual sales (all for cash) for this new line are 1,400,000 units at $30 per unit; cash variable cost is $10 per unit; and cash fixed costs are $11,000,000 per year The investment project requires $35,000,000 of cash outflow and has a project life of 4 years. At the end of the 4-year useful life, there will be no terminal disposal value. Assume all cash flows occur at year-end except for initial investment amounts for and management is concerned about the reliability of the estimates. The controller has proposed applying sensitivity analysis t selected factors. Ignore Men's fragrance is a new market Senta ncome taxes in your computations. Sentax's required rate of return on this project is 16%
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