You are considering a new product launch. The project will cost $960,000, have a

Question

You are considering a new product launch. The project will cost $960,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 240 units per year; price per unit will be $25,000; variable cost per unit will be $19,500; and fixed costs will be $830,000 per year. The required return on the project is 15 percent, and the relevant tax rate is 35 percent. Requirement 1: Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within

Explanation / Answer

PLZ RATE ME........

assume you know how to do the finance part--computing the cash flows..

then use the NPV function to calculate the discounted cash flow. if it is positive, accept the project. if it is negative, don't accept the project.

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