Exam type question $\%$ Required Rate of Return Face Shield Project at $8\%$ POTD#$3$

Bridgette and Lisa just completed the development of a better face shield for health workers. The new product is expected to produce annual revenues of $$200,000\mathrm{.}00$ Bridgette and Lisa require an investment in an advanced $3$D Printer costing $$200,000\mathrm{.}00$ The project has an expected life of $5$ years based upon the development and dissemination of a vaccine for coronavirus. The $3$D printer will have $$100\mathrm{.}00$ salvage value as the market for $3$D printers will be flooded as demand plummets for face shields. In order to produce the face shields Bridgette and Lisa must maintain a large inventory of plastic pellets. Therefore, working capital is expected to increase by $$200,000\mathrm{.}00$ However, Bridgette and Lisa will not recover any of working capital at the end of the products life cycle. Annual operating expenses are estimated at $$101,000\mathrm{.}00$ The required rate of return is $8\%.$

Calculate the Net Present Value

Prepare a schedule of projected annual cash flows