How do I find tot addition costs and incremental sales needed to cover costs? Also did I calculate theincremental sales correctly?

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Historic Base Sales Sales Growth Category Growth Rate Incremental Growth Rate Total Sales Growth Rate Gross Margin Marketing and R&D Start-Up Expenses Launch Proj Yr 1 Proj Yr 2 Proj Yr 3 Proj Yr 4 Proj Yr 5 $ 139,500.00 $ 147,870.00 $ 155,263.50 $162,250.36 $168,740.37 $ 175,489.99 4% 4% 4% 4% 4% 2% 156 0.5% 0% 0% 6% 5% 4.50% 4% 4% 69% 69% 69% 69% 69% $ 700.00 Partial case returns net of salvage Label Conversion costs 1800 700 Freight charge/launch year expenses 400 Other miscellaneous 300 3200 New Investment PP&E Cap/Pump molds 1,590 Change parts 260 Pump assembly 570 Depreciable life 6 Table 2: NPV Analysis Initial Investment Incremental sales Incremental COGS Incremental gross profit Start up Proj Yr 1 Proj Yr 2 Proj Yr 3 Proj Yr 4 Proj Yr 5 -2,420 $ 8,370.00 $ $ 2,594.70 $ $ 5,775.30 $ 7,393.50 2,291.99 $ 5,101.52 $ $ 6,986.86 $ 2,165.93 $ 4,820.93 $ 6,490.01 $ 2,011.90 4,478.11 $ 6,749.61 $ 2,092.38 4,657.23 Depreciation $ 403.33 $ 403.33 $ 403.33 $ 403.33 $ 403.33 Marketing and R&D 700.00 Partial case returns net of salvage 1,800.00 - Label conversion costs 700.00 - Freight charge/launch year expenses 400.00 - Other miscellaneous 300.00 Incremental expenses $ 4,303.33 $ 403.33 $ 403.33 $ 403.33 $ 403.33 Cost reduction from new design 119 119 119 119 119 Incremental operating profit Related taxes $ 1,590.97 After tax imact on profits Add Back Depreciation Projected cash flows $ 429.56 1,161.41 $4,817.18 $ 1,300.64 $3,516.54 $ 4,536.60 $4,193.78 $ 1,224.88 3,311.72 $ 4,372.90 1,132.32 3,061.46 $ 1,180.68 3,192.22 $ 403.33 $ -2,420 $ 1,564.74 $ 403.33 $ 3,919.88 $ 403.33 $ 3,715.05 $ 403.33 $ 3,464.79 $ 403.33 3,595.55 NPV IRR $10,705.58 Discount rate: 105% 7% Table 3: Break Even Analysis Total additional costs: intial investment and additional expenses Incremental sales needed to cover costs Historic Base Sales Sales Growth Category Growth Rate Incremental Growth Rate Total Sales Growth Rate Gross Margin Marketing and R&D Start-Up Expenses Launch Proj Yr 1 Proj Yr 2 Proj Yr 3 Proj Yr 4 Proj Yr 5 $ 139,500.00 $ 147,870.00 $ 155,263.50 $162,250.36 $168,740.37 $ 175,489.99 4% 4% 4% 4% 4% 2% 156 0.5% 0% 0% 6% 5% 4.50% 4% 4% 69% 69% 69% 69% 69% $ 700.00 Partial case returns net of salvage Label Conversion costs 1800 700 Freight charge/launch year expenses 400 Other miscellaneous 300 3200 New Investment PP&E Cap/Pump molds 1,590 Change parts 260 Pump assembly 570 Depreciable life 6 Table 2: NPV Analysis Initial Investment Incremental sales Incremental COGS Incremental gross profit Start up Proj Yr 1 Proj Yr 2 Proj Yr 3 Proj Yr 4 Proj Yr 5 -2,420 $ 8,370.00 $ $ 2,594.70 $ $ 5,775.30 $ 7,393.50 2,291.99 $ 5,101.52 $ $ 6,986.86 $ 2,165.93 $ 4,820.93 $ 6,490.01 $ 2,011.90 4,478.11 $ 6,749.61 $ 2,092.38 4,657.23 Depreciation $ 403.33 $ 403.33 $ 403.33 $ 403.33 $ 403.33 Marketing and R&D 700.00 Partial case returns net of salvage 1,800.00 - Label conversion costs 700.00 - Freight charge/launch year expenses 400.00 - Other miscellaneous 300.00 Incremental expenses $ 4,303.33 $ 403.33 $ 403.33 $ 403.33 $ 403.33 Cost reduction from new design 119 119 119 119 119 Incremental operating profit Related taxes $ 1,590.97 After tax imact on profits Add Back Depreciation Projected cash flows $ 429.56 1,161.41 $4,817.18 $ 1,300.64 $3,516.54 $ 4,536.60 $4,193.78 $ 1,224.88 3,311.72 $ 4,372.90 1,132.32 3,061.46 $ 1,180.68 3,192.22 $ 403.33 $ -2,420 $ 1,564.74 $ 403.33 $ 3,919.88 $ 403.33 $ 3,715.05 $ 403.33 $ 3,464.79 $ 403.33 3,595.55 NPV IRR $10,705.58 Discount rate: 105% 7% Table 3: Break Even Analysis Total additional costs: intial investment and additional expenses Incremental sales needed to cover costs

Answer rating: 100% (QA)

To perform the NPV analysis and breakeven analysis we need to calculate the following 1 Incremental ... View the full answer