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Your CEO has asked you to evaluate launching a new product line for your company. Based on your experience and knowledge of the market, you
Your CEO has asked you to evaluate launching a new product line for your company. Based on your experience and knowledge of the market, you have estimated the following results for the first five (5) years of the Project. Expected revenues: Year (000s) 1 2 3 4 5 $80.00 $120.00 $150.00 $300.00 $360.00 The Company yearly purchases (Cost of Goods Sold COGS) from suppliers = 50% of the forecasted sales. General and administrative expenses (wages, taxes, office etc.) are estimated at 15% of sales. Sales salaries and commissions are estimated to be 10% of sales. The Project requires and initial equipment investment of $150,000. Annual depreciation expense of the equipment is $50,000. Annual interest expense on the money borrowed
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