About the investment opportunity

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Reference no: EM13939767

Assume NEWC has an investment opportunity (similar to the air bag opportunity in Other People's Money).The firm can spend $325 million on refurbishing its wire and cable plant to develop a product that will be sold in packets or units of twenty. Assume the firm forecasts this product to have the same profit margin (NI available to common stock/sales) as the other products in its product portfolio: ($8.52 per 1,000 individual units) and that the margin WACC is 11% for this risk class project product. If the firm's sells the same number of units or packets every year for the next twenty years, how many packets (or units of 20) must be sold each year for this to be zero-NPV project?

Reference no: EM13939767

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