Project Cost

Use WBS activity costs provided $($see Excel$)$ to calculate total project cost. Project overhead is $25\%$ of total WBS activity cost. Show cost with and without overhead costs.

Project NPV

Given the provided $5$ year cash inflows $($see Excel$)$ calculate the project NPV$.$ The discount rate will be $8\%$ for the project. Show the project NPV with and without overhead $($i$.$e$.$ you need to calculate NPV using WBS costs first, then recalculate NPV after you add$-$in overhead$).$ However, your recommendation should be based on total project cost $($WBS activity cost $+$ overhead$).$ Provide a recommendation to approve $/$ reject the project $...$ include your rationale

Include screenshots of your NPV calculations.

Remember that the initial investment $($outflow$)$ for NPV calculation is total WBS costs then recalculate NPV using total WBS costs $+$ Overhead

Activity Cost

WBS Item

R&D Project Development

Need Survey $ $95,000$

Set Product Specs $ $57,600$

Shelf life Report $ $19,200$

Nutrition Report $ $15,000$

Select Fruit Suppliers $ $15,000$

Initial Production

Equipment Rehab $ $400,000$

Production Trials $ $235,200$

Quality Trials $ $125,000$

Quality Metrics $ $7,000$

Quality Training $ $200,000$

Distribution

Market Testing $ $80,000$

Package Design $ $31,000$

Select Distributors $ $80,000$

Legal

Complete FDA Certification $ $60,000$

Register Trademark $ $14,400$

Prepare Product Launch $ $268,800$

Overhead $=25\%$ total cost of WBS activities

Cash Flows for NPV

Year $1$ Year $2$ Year $3$ Year $4$ Year $5$

$ $575,000$ $ $575,000$ $ $575,000$ $ $575,000$ $ $575,000$

DISCOUNT RATE: $8\%$