a. Calculate the payback period for this project. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Calculate the NPV for this project. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. Calculate the IRR for this project. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
a. Calculate the payback period for this project. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Calculate the NPV for this project. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. Calculate the IRR for this project. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 11E
Related questions
Question
Kindly help me solve this problem using Excel. Have to calculate the payback period for the project, calculate the
![Pappy's Potato has come up with a new product, the Potato Pet (they are
freeze-dried to last longer). Pappy's paid $145,000 for a marketing survey to
determine the viability of the product. It is felt that Potato Pet will generate
sales of $860,000 per year. The fixed costs associated with this will be
$214,000 per year, and variable costs will amount to 18 percent of sales. The
equipment necessary for production of the Potato Pet will cost $900,000
and will be depreciated in a straight-line manner for the four years of the
product life (as with all fads, it is felt the sales will end quickly). This is the
only initial cost for the production. Pappy's has a tax rate of 25 percent and a
required return of 13 percent.
a. Calculate the payback period for this project.
Note: Do not round intermediate calculations and round your answer to
2 decimal places, e.g., 32.16.
b. Calculate the NPV for this project.
Note: Do not round intermediate calculations and round your answer to
2 decimal places, e.g., 32.16.
c. Calculate the IRR for this project.
Note: Do not round intermediate calculations and enter your answer as
a percent rounded to 2 decimal places, e.g., 32.16.
a. Payback period
b. NPV
c. IRR
years
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F483c3d17-1621-47af-bfd2-86acecf64938%2Fd9d37aa1-7c34-4601-8be0-2e9088273ff2%2Fo1xf1pk_processed.png&w=3840&q=75)
Transcribed Image Text:Pappy's Potato has come up with a new product, the Potato Pet (they are
freeze-dried to last longer). Pappy's paid $145,000 for a marketing survey to
determine the viability of the product. It is felt that Potato Pet will generate
sales of $860,000 per year. The fixed costs associated with this will be
$214,000 per year, and variable costs will amount to 18 percent of sales. The
equipment necessary for production of the Potato Pet will cost $900,000
and will be depreciated in a straight-line manner for the four years of the
product life (as with all fads, it is felt the sales will end quickly). This is the
only initial cost for the production. Pappy's has a tax rate of 25 percent and a
required return of 13 percent.
a. Calculate the payback period for this project.
Note: Do not round intermediate calculations and round your answer to
2 decimal places, e.g., 32.16.
b. Calculate the NPV for this project.
Note: Do not round intermediate calculations and round your answer to
2 decimal places, e.g., 32.16.
c. Calculate the IRR for this project.
Note: Do not round intermediate calculations and enter your answer as
a percent rounded to 2 decimal places, e.g., 32.16.
a. Payback period
b. NPV
c. IRR
years
%
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