Question: I Need Answer in Excel You are considering a start of a new product line. Project cost $800,000 Project life 4 year Depreciation straight-line to
I Need Answer in Excel
You are considering a start of a new product line.
Project cost $800,000
Project life 4 year
Depreciation straight-line to zero
Feasibility study $10,000
Sales units $450 units per Year
Price per unit $18,000
Variable cost per unit $15,400
Fixed costs $610,000 per year
The required return on the project is 10 percent, and the relevant tax rate is 35 percent.
c. Use Excel data table to perform a sensitivity analysis to change in fixed cost.
d. Using Excel, what will be the new base case NPV if equipment will be sold at the end of project for $500,000 and that there will be an initial investment in net working capital of $50,000 which will be recovered at the end of the project.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
