A college friend of mine just filed for a patent for a new product - the...
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A college friend of mine just filed for a patent for a new product - the "bowling buddy" bowlers' training aid (Google it after the exam). The bowling buddy sells for $55 and the variable cost per unit is $26. They rent production space for $25,000 annually. The initial investment is $250,000 and the project life is 5 years. Assume appropriate discount rate is 10% and ignore taxes. Assuming my friend can sell 3,000 bowling buddies per year, what is the discounted payback period of the project? A college friend of mine just filed for a patent for a new product - the "bowling buddy" bowlers' training aid (Google it after the exam). The bowling buddy sells for $55 and the variable cost per unit is $26. They rent production space for $25,000 annually. The initial investment is $250,000 and the project life is 5 years. Assume appropriate discount rate is 10% and ignore taxes. Assuming my friend can sell 3,000 bowling buddies per year, what is the discounted payback period of the project?
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Answer rating: 100% (QA)
To calculate the discounted payback period of the project we need to determine how long it takes for the net cash flows to recover the initial investm... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
8th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
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