+1-415-670-9189
info@expertsmind.com
Calculate the npv and irr for this project
Course:- Financial Management
Reference No.:- EM13942920




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Management

Pappy’s Potato has come up with a new product, the Potato Pet (they are freeze-dried to last longer). Pappy’s paid $126,000 for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $581,000 per year. The fixed costs associated with this will be $185,000 per year, and variable costs will amount to 21 percent of sales. The equipment necessary for production of the Potato Pet will cost $632,000 and will be depreciated in a straight-line manner for the four years of the product life (as with all fads, it is felt the sales will end quickly). This is the only initial cost for the production. Pappy’s is in a 30 percent tax bracket and has a required return of 15 percent.

Requirement 1: Calculate the payback period for this project. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Payback period years

Requirement 2: Calculate the NPV for this project. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

NPV $

Requirement 3: Calculate the IRR for this project. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

IRR %




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
A stock is expected to pay the following dividends per share over the next four years, respectively: $0.00, $2.30, 2.60, and $2.90. If you expect to be able to sell the stock
Set up the amortization schedule for a five-year, $1 million, 9 percent loan that requires equal annual end-of-year principal payments plus interest on the unamortized loan
Assume that the required reserve requirement is 10% on checkable deposits and that a bank has $150 million in checkable deposits. If the bank has $ 20 million in total reserve
For the first time in 70 years, Standard & Poor’s lowered its rating of U.S. Treasury debt from AAA to AA. How does this action factor into your decision to invest in governme
The information to be included are the merging of the four earlier assignments on ROI which include the topics of the introductory overview of ROI, justification for a soft
In 2014 Electric Autos had sales of $180 million and assets at the start of the year of $310 million. If its return on start-of-year assets was 10%, what was its operating pro
You have a corporate (not a Treasury) bond which has a 7% coupon and pays interest on January 1 and July 1 of each year. Who is entitled to receive the interest you pay?
Why do states usually try to solve their disagreements through bargaining? War is a costly option that states would rather avoid if possible. States use the negotiation period