Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

We project unit sales for a now housohold-use laser-guided cockroach search and destroy system as follows: 94,500 106,500 129,500 135,500 The now system will be

image text in transcribed
We project unit sales for a now housohold-use laser-guided cockroach search and destroy system as follows: 94,500 106,500 129,500 135,500 The now system will be priced to sell at $410 each. The oockroach eradicator projeat will require $1,700,000 in net working capital to start, and total net working capital will rise to 15 percent of the change in sales. The variable cost per unit is $280, and total fixed costs are $1,200,000 per year. The equipment necessary to begin production will cost a total of $16 million. This equipment is mostly industrial machinery and thus qualifies for CCA at a rate of 20 percent. In five years, this equipment will actually be worth about 20 percent of its cost. The relevant tax rate is 35 percent, and the required return is 16 percent. 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) 15,091,314

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

Listed Volatility And Variance Derivatives

Authors: Yves Hilpisch

1st Edition

1119167914, 978-1119167914

More Books

Students also viewed these Finance questions

Question

Develop skills for building positive relationships.

Answered: 1 week ago

Question

Describe techniques for resolving conflicts.

Answered: 1 week ago

Question

Give feedback effectively and receive it appropriately.

Answered: 1 week ago