Cx.Co is considering adding a new product and have given you the responsibility toevaluate the project. The
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Question:
Cx.Co is considering adding a new product and have given you the responsibility toevaluate the project. The project requires an initial investment of $90,000 in new machinery and is estimated to generate sales revenue of $120,000 per year for three years. Manufacturing costs are estimayed to be at 60 percent of revenues. The machinery will be depreciated straight line to zero-book value over three years. The project will also require $10,000 of net working capital at the beginning which will be recouped when the project ends. Assume that the asset can sell for $10,000 at the end of the project. The corporate tax rate is 21 percent andrequired rate of return is 16.5 percent. please Calculate the NPV of the project
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