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You are considering a new product launch. The project will have an Initial cost for fixed assets of $1,150,000, a three year Iife, and no salvage Sales are projected at 230 units per year, price per unit will be $7,500, varnable cost per unit will be $3.900, and fixed costs will be $122,000 per year The required return is 14.5 pereent and the relevant tax rate is 24 percent. Based on your expertence, you think the unit sales and price are accurate within a2 percent range while costsmay vary by +3 percent. What is he worst-case NPV? Ine to

You are considering a new product launch. The project will have an Initial cost for fixed assets of $1,150,000, a three year Iife, and no salvage Sales are projected at 230 units per year, price per unit will be $7,500, varnable cost per unit will be $3.900, and fixed costs will be $122,000 per year The required return is 14.5 pereent and the relevant tax rate is 24 percent. Based on your expertence, you think the unit sales and price are accurate within a2 percent range while costsmay vary by +3 percent. What is he worst-case NPV? Ine to

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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ny Work You are consldering a new product launch. The project will have an Initlal cost for fixed assets of $1,150,000, a three-year Iife, and no salvage välue depreclation is stralght-line to zero, Sales are projected at 230 units per year, price per unit wii be $7,500, varnable cost per unit will be $3,900, and fixed costs will be $122.000 per year The required return is 14.5 percent and the relevant tax rate Is 24 percent. Based on your experience, you think the unit sales and price are accurate within a +2 percent range while costs may vary by +3 percent. What Is the worst-case NPV? Multiple Cholce $156,446 -$118.020 $162134 -$78,517 -$117.907
Transcribed Image Text:ny Work You are consldering a new product launch. The project will have an Initlal cost for fixed assets of $1,150,000, a three-year Iife, and no salvage välue depreclation is stralght-line to zero, Sales are projected at 230 units per year, price per unit wii be $7,500, varnable cost per unit will be $3,900, and fixed costs will be $122.000 per year The required return is 14.5 percent and the relevant tax rate Is 24 percent. Based on your experience, you think the unit sales and price are accurate within a +2 percent range while costs may vary by +3 percent. What Is the worst-case NPV? Multiple Cholce $156,446 -$118.020 $162134 -$78,517 -$117.907
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