Question: Ramp-up cost Development cost Estimated development time Pilot testing Marketing and support cost $1,250,000 9 months $ 200,000 $ 400,000 $ Sales and production volume

Ramp-up cost Development cost Estimated development time Pilot testing Marketing and support cost $1,250,000 9 months $ 200,000 $ 400,000 $ Sales and production volume Unit production cost 150,000 per year 60,000 per year $ Unit price 69 69 100 $ Interest rate 205 8% Tuff Wh Assume all cash flows occur at the end of each period. a. What is the net present value (discounted at 8%) of this project? Consider all costs and expecte thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calcu nearest thousand.) Answer is complete but not entirely correct. Net present value $ 8,802,075 x b. What is the impact on NPV for the Kiddy Dozer if the actual sales are 50,000 per year? 70,000 per thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculati nearest thousand.) Answer is complete but not entirely correct. NPV 50,000 NPV 70,000 $ 5,761,625 $ 8,802,075 c. Based on the original sales level of 60,000, what is the effect on NPV caused by changing the discount r 11%? (Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any in Round your answer to the nearest thousand.) Answer is complete but not entirely correct. NPV 96 NPV 10% 7.953.610 6.833.823 NPV 11% 6.622.611

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