Question
Shonda just completed the development of a better face shield for health workers. The new product is expected to produce annual revenues of $1,200,500.00 Shonda
Shonda just completed the development of a better face shield for health workers. The new product is expected to produce annual revenues of $1,200,500.00 Shonda require an investment in an advanced 3D Printer costing $3,000,000.99 The project has an expected life of 5 years based upon the development and dissemination of a vaccine for coronavirus. The 3D printer will have $999,999.99 salvage value as the market for 3D printers will be flooded as demand plummets for face shields. In order to produce the face shields Shonda must maintain a large inventory of plastic pellets. Therefore, working capital is expected to increase by $750,755.00 However, Shonda will only recover half of her working capital investment at the end of the products life cycle. Annual operating expenses are estimated at $901,852.32 The required rate of return is 4%. Calculate the Net Present Value
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