Question: to this problem! Powaline Products, Inc. is considering introducing a new elliptical trainer, the NOVID-19, for the home market. The CFO of Powaline hos assembled
to this problem! Powaline Products, Inc. is considering introducing a new elliptical trainer, the NOVID-19, for the home market. The CFO of Powaline hos assembled the following financial information about this new product Last month, Powaline Products hired a marketing company to conduct a survey of its current users to determine the potential market demand for a new product. Powaline received the marketing report last week along with a bill for $230,000 asking for payment in 10 days . Powoline Products will need to spend $14,700,000 today to build a new factory to manufacture and assemble the NOVID-19. This investment will be depreciated on a straight-line basis to a $3,000,000 salvage value over 10 years. Powaline Products intends to sell the factory in 10 years for $3,000,000 Production of the NOVID-19 will require an immediate increase in net working capital of $2,000,000. This investment will be fully recovered at the end of the life of the project Revenue from sales of the NOVID-19 are expected to be $11,000,000 per year for each of the next 10 years The NOVID-19 is expected to decrease sales of other Powaline Products elliptical trainers by 31,500,000 per year for each of the next 10 years Incremental direct costs to the entire company associated with producing and selling the NOVID-19 are estimated to be $7,000,000 per year for each of the next 10 years. Powaline Products' marginal tax rate is 35% Powaline Products' weighted average cost of capital (WACC) is 12% Based on the information provided above, what is the non-operating terminal cashflow in year 10 for this project? Enter your answer as a dollar amint
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