The writer is very fast, professional and responded to the review request fast also. Thank you.
Presentation/PPT
27/08/2022
Corporation developed a new product that it believes will have broad market appeal. The company’s recent cost and
marketing studies revealed the following:
a. New equipment costing $360,000 would need to be acquired to produce the product. The equipment is estimated to have a six-year useful life, with no salvage value at the end of the six years.
b. Sales in units over the next six years are projected as follows:
Year 1-20,000
Year 2-30,000
Year 3-50,000
Years 4-6 – 60,000
Production and sales of the new product would require working capital of $450,000 to finance accounts receivable, inventory, and day-to-day cash needs. This working capital would be released at the end of the project’s life.
c. The product would sell for $35 each; variable costs for production, administration, and sales would be $22 per unit.
d. Fixed costs would total $240,000 per year. These fixed costs are for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the new equipment (see item a. above). Note that the annual depreciation on the new equipment referenced in item a. above is on a straight-line basis over the six-year life.
e. To gain rapid entry into the market, the company would need to advertise heavily. The advertising program would be:
Year 1-2 – $200,000
Year 3 – $180,000
Years 4-6 – $120,000
f. The company’s required rate of return is 20%. Ignore taxes.
Please show how came to this answer
1. Determine the net present value of the investment, construct a schedule that shows the calculation of cash flows for the current year and for years 1 through 6. Then, calculate the NPV assuming a discount factor of 20%. Ignore taxes.
2. Would recommend that John Corporation accept the new product in its product line? Why or why not?
The writer is very fast, professional and responded to the review request fast also. Thank you.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more