Clyde plc is developing a new product line called Pinky.

Initial calculations are based on demand for Pinky at 20,000 units per year each year for the four-year life of the project. The cost is 900,000 with no residual value. The company uses a discount factor of 10% Details of the product are:

Selling price per unit	50.00
Variable cost per unit	20.00

The finance director has asked you to calculate the net present value for the worst case scenario: Investment increases by 100,000 Annual sales fall to 18,000 units Selling price falls by 10% per unit Variable costs increase by 2 per unit Discount factor is 12%

(Ignore inflation and tax)

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