$25.00 help please
A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 55% of sales. Indirect incremental costs are estimated at $80,000 a year. The project requires a new plant that will cost a total of $1,000,000, which will be a depreciated straight line over the next 5 years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000.
Assume there is no need for additional investment in building the land for the project. The firm's marginal tax rate is 35%, and its cost of capital is 10%.
Get the NPV -- do it the long way, so I can see how it's done. PLEASE
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- Posted on Dec 03, 2011 at 7:22:21PM
business NPV.docx (15K) (Preview)
Excel sheet for the cash flow and NPV.xls (31K)
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