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Western Governors University *

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202

Subject

Finance

Date

Apr 3, 2024

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1

Uploaded by LieutenantGalaxy10519

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Assume all cash flows occur at the end of each period. a. What are the yearly cash flows and their present value (discounted at 10 percent) of this project? What is the net present value? Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Negative value should be indicated by a minus sign. Et present value . ] b. Perot’s engineers have determined that spending $10 million more on development will allow them to add even more advanced features. Having a more advanced chip will allow them to price the chip $50 higher in both years ($870 for year 1and $700 for year 2). What is the NPV of the project if this option is implemented? Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Negative value should be indicated by a minus sign. Et present value ] | c. If sales are only 260,000 the first year and 130,000 the second year, what would the NPV of the project be? Assume the development costs and sales price are as originally estimated. Note: Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Negative value should be indicated by a minus sign. Et present value ] |
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