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Midland College Operations And Supply Chain Management Assignment Help - Net present value


Question - The following table presents sales forecasts for Gold Gelt Giftware. The unit price is $20.00. The unit
cost of the giftware is $10.00.
Year Unit Sales
1 25,000
2 33,000
3 17,000
4 8,000
It us expectied that net working capital will amount to 20% of slaes in the following year. For example
the store will need an initial year-0 investemtn. In working capital of 20 x 26,000 = 100,000. Plan and
equipment necessary to establish the Giftware buisness will require an additional investment of
220,000. This investment will be depreciated using MACRS and a 3-year life. After 4 years. The
equipment will have an exonomic and book value of zero. The firm tax rate is 20%. What is the net
present value of the project. The discount rate is 10% ...Read More

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