Calculate the npv of the project in given case

Reference no: EM132056921

Question: Profound Products, Inc., is planning to market a new banana peeler. Projected sales are $80,000 per year for the first two years, declining at a rate of 25% per year for the next four years. The peeler will be discontinued after year 6. COGS amounts to 85% of sales. Required inventories are $10,000 now, rising by 15% per year for the first two years, then falling by 40% per year for the next three years. Assume inventory shrinkage in each year is equal to 2% of the previous year's inventory. Inventory is zero at year 6. The tax rate is 35% and the OCC is 11%. Calculate the NPV of this project.

Reference no: EM132056921

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