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You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphite-like material in its tennis rackets. The company has
You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphite-like material in its tennis rackets. The company has estimated the information in the following table about the market for a racket with the new material. The company expects to sell the racket for six years. The equipment required for the project is straight-line depreciated and has no salvage value. The required return for projects of this type is 13 percent, and the company has a 21 per cent tax rate. What is the NPV of the project in a scenario analysis in which pessimistic state happens for market size and market share?