Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

We project unit sales for a new household-use laser-guided cockroach search and destroy system as follows, Year 1 2 3 4 5 Unit Sales 98,500

image text in transcribed
We project unit sales for a new household-use laser-guided cockroach search and destroy system as follows, Year 1 2 3 4 5 Unit Sales 98,500 110,500 133,500 139,500 92,500 The new system will be priced to sell at $450 each The cockroach eradicator project will require 51700.000 in net working capital to start, and total net working capital will rise to 15% of the change in sales. The variable cost per unit is $320. and total fixed costs are $2.000.000 per year the equipment necessary to begin production will cost a total of $20 million. This equipment is mostly industrial machinery and thus qualities for CCA at a rate of 20%. In five years, this equipment will actually be worth about 20% of its cost The relevant tax rate is 35%, and the required return is 18%. Based on these preliminary estimates, what is the NPV of the project! (Enter the answer in dollars. Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit Stign in your response) NPV

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions