What is the rate of return for this project

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Q1. JBL is producing a new speaker and they want to know how much to charge for it. The development costs $3.9 million for the first year and $2.4 million per year for the next 3 years to maintain their endorsement deal with Spotify. If their cost of capital is 13% and they anticipate 45,000 people buying their speaker every year, how much should they charge per speaker to breakeven on their investment for the life of their endorsement deal with Spotify?

Q2. Rogue Fitness is considering investing in a new mold for the weight plates it sells. The equipment will cost Rogue $2,479,000. It would allow them to mold 150 weight plates per day and they operate 360 days per year. Each weight plate produced will make them a gross profit of $9.65, but the company has to pay 22% taxes on their profit. If we looked at everything on a yearly basis and the lifecycle of the mold is 9 years, what is the rate of return for this project?

Q3. A company is looking at 4 mutually exclusive approaches to their new engineering project.

- Project approach 1 uses green hydrogen for fuel and has an NPV of $3,000,000.

- Project approach 2 uses conventional natural gas for fuel and has an NPV of $4,000,000

- Project approach 3 uses biomass for fuel and has an NPV of -2,000,000.

- Project approach 4 uses water driven turbines for fuel and has an NPV of $1,000,000

What would be your recommendation for this project approach?

Reference no: EM133096771

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