Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The Johnny Pickles Brewing Company has been successful as a small craft microbrewery with a focus on distributing its products to bars and restaurants.
The Johnny Pickles Brewing Company has been successful as a small craft microbrewery with a focus on distributing its products to bars and restaurants. They are considering a bottling line that will allow them to start distributing to grocery and party stores. The equipment will cost $86,669 to purchase. It's expected that additional sales will be $25,712 per year while variable expenses are expected to increase $4,820 annually. The equipment is expected to last 5 years and will need a one time overhaul in year 3 that will cost $7,929. It will have no salvage value at the end of its useful life. The Johnny Pickles Brewing Company uses a discount rate of 11% when deciding to accept a project. What is the net present value of the project? Round your answer to the whole dollar. If the NPV is negative, enter as a negative. If it's positive, enter as a positive.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started