Bmt has developed a new product

Assignment Help Finance Basics

Reference no: EM13712086

BMT has developed a new product. It can go into production for an initial investment of $4,500,000. The equipment will be depreciated using straight-line depreciation over 4 years to a value of zero. The firm believes that net working capital at each date will equal 20 percent of next year's forecast sales. The firm estimates that variable costs are equal to 45% of sales and fixed costs are $400,000 per year. Sales forecasts in dollars are below. The project will come to an end after 4 years, when the product becomes obsolete. The firm's tax rate is 35 percent, and the discount rate is 8 percent. Calculate the NPV.

Reference no: EM13712086

Questions Cloud

What is the flux through the ring : A circular plastic ring has a radius of R=50 cm, and is placed with the plane of the ring horizontal in a location where there is a magnetic field of 9.0 mT pointing straight up vertically. Part 1- What is the flux through the ring?

Problem on projectile : f David whirled the sling to the point where the sling subtended an angle is 4.43o with the horizontal, with what speed did the rock strike Goliath?

Estimate the maximum strength of a magnetic field : Estimate the maximum strength of a magnetic field needed to control the deflection of an electron beam.

Magnetic energy stored in the mri tunnel : To carry such a large current, the wires shown as cross sections, with current from the array of wires running out-of and into-the page, respectively are cooled with liquid helium until they become superconducting.

Bmt has developed a new product : BMT has developed a new product. It can go into production for an initial investment of $4,500,000. The equipment will be depreciated using straight-line depreciation over 4 years to a value of zero. The firm believes that net working capita..

The velocity and acceleration vectors : Give an example of this fact where the velocity vector is not constant. Be sure to show that your velocity vector satisfies both conditions.

Find an expression for the electric field : An infinitely long cylinder of radius R has a uniform charge density distributed throughout the volume. You can either call this a uniform volume charge density ρ(C/m3) over differential piece of volume dV, or a constant linear charge density λ(C/..

European call options on the stock xyz with exercise price : European call options on the stock XYZ with an exercise price of $35 and maturity of6-months are currently selling for $4. XYZ does not pay any dividends. European putoptions with the same maturity and exercise price are selling for 67¢. You wo..

What visible wavelength is reflected most : You are looking straight down from an aeroplane, with the Sun directly overhead. What visible wavelength(s) is/are reflected most brightly due to constructive interference?

User Account

All Pages