Orange Computers Inc. is considering implementing an advertising campaign to boost sales in the next 3 years. A marketing study that cost $65,000 shows that number of computers sold can increase by 10% each year (relative to the previous year) with an annual advertising cost of $500,000. Currently the company sells 10,000 computers each year at $1,500 each, and the cost per computer is $900. In order to prepare for the campaign and boost in sales, the company needs to add 3,000 computers to its inventory at year 0 (to be recaptured at the end of the project). The discount rate is 5%. What's the PV of all cashflows from year 1 to year 3?

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The PV of all cash flows from year 1 to year 3 as s... View the full answer