Games Inc. is considering developing and marketing a new electronic game and has compiled the following product

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Question:

Games Inc. is considering developing and marketing a new electronic game and has compiled the following product information.

Year

Production Cost

Promotion Cost

Sales Revenue

Year 1

$32,000

Year 2

$32,000

$64,000

Year 3

$32,000

$96,000

$256,000

Year 4

$32,000

$128,000

Year 5

$32,000

Required:

1)Draw a detailed time line of all cash flows.

2)Calculate the NPV of the new electronic game product if the company requires a return of 16% on its investment. Show all calculations and calculator inputs.

3)Should the company proceed with this new product? Why or why not?

Posted Date: May 18, 2024 09:01 PM

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Games Inc. is considering developing and marketing a new electronic game and has compiled the following product

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