corporate finance

Project Description:

applied nanotech is thinking about introducing a new surface cleaning machine. the marketing department has come up with the estimate that applied nanotech can sell 15 units per year at $305,000 net cash flow per unit for the next five years. the engineering department has come up with the estimate that developing the machine will take a $15 million initial investment. the finance department has estimated that a 16 percent discount rate should be used.

a.
what is the base-case npv? (enter your answer in dollars, not millions of dollars, i.e. 1,234,567. negative amount should be indicated by a minus sign. do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

base-case npv $

b.
if unsuccessful, after the first year the project can be dismantled and will have an aftertax salvage value of $11 million. also, after the first year, expected cashflows will be revised up to 20 units per year or to 0 units, with equal probability. what is the revised npv? (enter your answer in dollars, not millions of dollars, i.e. 1,234,567. do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

revised npv $
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Project Stats:

Price Type: Fixed

Project Budget: $0 to $10
Completed
Total Proposals: 1
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