Question: X company is thinking about adding a new product line. it is expected that Initial cost 2,780,000 Annual cash inflow 2,540,000 Annual cash outflows 2,260,000

X company is thinking about adding a new product line. it is expected that

Initial cost 2,780,000

Annual cash inflow 2,540,000

Annual cash outflows 2,260,000

Estimated useful life 10 years

Salvage value 4,400,000

discount rate 8%

calculate the net present value of the project

Please explain with details?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

Exercise 2-19 (Algo) Record transactions, post to T-accounts, and prepare a trial balance (LO2-4, 2-5, 2-6) Green Wave Company plans to own and operate a storage rental facility. For the first month...

Q:

Can you please help me with questions 8 and 9 for Case 6..... I have answers to questions 1-7 if needed... Cases for Management Decision-Making CA-1 Suggested Uses of Cases Case Overview CASE 1 This...

Q:

Hello I need help with an article review. Just one page of an article review. Anyone ready to help? \fJournal of Defense Resources Management No. 1 (1) / 2010 NET PRESENT VALUE SIMULATING WITH A...

Q:

Ravenscroft, Inc. Suggested Analysis Questions: 1. Assuming the company does not invest in the new product line, prepare forecasted income statements and balance sheets at year-end 2010, 2011, and...

Q:

3 Suppose a beverage company is considering adding a new product line. 4 Currently the company sells apple juice and they are considering selling a fruit drink. 5 The fruit drink will have a selling...

Q:

please help Final Case Project 2 3 Suppose a beverage company is considering adding a new product line. 4 Currently the company sells apple juice and they are considering selling a fruit drink. 5 The...

Q:

Question 1 (1 point) For pro forma purposes, the Martin-Jones Company uses a 7.5% profit margin and a 60 percent dividend payout ratio. Sales for next year are projected to be $267,000. What is the...

Q:

Final Case Project Suppose a beverage company is considering adding a new product line. Currently the company sells apple juice and they are considering selling a fruit drink. The fruit drink will...

Q:

Question 1 [55] Merafe Mining is evaluating the possibility of adding a new product line to its product mix. Because the exercise requires a detailed analysis of all possible risk scenarios or cases,...

Q:

Question 1 [55] Merafe Mining is evaluating the possibility of adding a new product line to its product mix. Because the exercise requires a detailed analysis of all possible risk scenarios or cases,...

Q:

Hello, I need help with this Excel assignment. It involves the use of what if analysis. Capital Budgeting - Cott Corpo Suppose that the Cott Corporation (COT) is considering adding a new product...

Q:

The following information was taken from the internal financial records of Southern Robotics regarding a patent filed in 2011 for a new robotics arm used for manufacturing: 1. Legal and filing fees...

Q:

Find the probability that a piece of data picked at random from a normal population will have a standard score (z) that lies between the following pairs of z-values: a. to z = - 2.75 z = -1.38 b. to...

Q:

Choose the correct formula for gross profit margin. * Revenue / cost of goods sold ( Revenue - cost of goods sold ) / cost of goods sold Cost of goods sold / revenue ( Net revenue - cost of goods...

Q:

A company should pursue first mover advantages by entering an alliance i The company has the required complementary assets There are very few capable competitors Both A and B The company does not...

Q:

Identify some ethical issues and their relevance to employee relations

Q:

Explain the concepts, values and legal framework that underline the disciplinary process in employment

Q:

Describe the major issues relating to sexual harassment in the workplace and the implications for managing employee relations