Calculate the payback period for the project

Reference no: EM132027208

Question: Pappy's Potato has come up with a new product, the Potato Pet (they are freeze-dried to last longer). Papp/s paid $138,000 for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $593,000 per year. The fixed costs associated with this will be $197,000 per year, and variable costs will amount to 19 percent of sales. The equipment necessary for production of the Potato Pet will cost $656,000 and will be depreciated in a straight-line manner for the four years of the product life (as with all fads, it is felt the sales will end quickly). This is the only initial cost for the production. Pappy's has a tax rate of 30 percent and a required return of 15 percent.

Calculate the payback period for this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Payback period years

Calculate the NPV for this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $

Calculate the IRR for this project. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Reference no: EM132027208

Questions Cloud

Principles of the z distribution or those associated : Should the assistant try to apply the principles of the Z distribution or those associated with the t distribution?

Find what will be the company return on equity : Pacific Packaging's ROE last year was only 5%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 40%.

How culture impacts a persons self-development : The culture in which were raised, the culture(s) we live or visit, and the cultures of others that we share relationships with all impact our world view.

Mean and standard deviation of the average loss : What are the mean and standard deviation of the average loss for 15 policies? (Round standard deviation to two decimal places.)

Calculate the payback period for the project : Pappy's Potato has come up with a new product, the Potato Pet (they are freeze-dried to last longer). Papp/s paid $138,000 for a marketing survey to determine.

What is your personal philosophy of recreation : What is your personal philosophy of recreation, leisure, and play? A philosophy is a personal belief that has been shaped by knowledge learned.

What is the minimum probability of performing : If the system is to have a 0.8 probability of performing, what is the minimum probability of performing needed by each of the individual components?

Can you make a profit in the event of price convergence : Can you make a profit in the event of price convergence at time 2 by shorting an arbitrary number X of shares of stock B for each share of stock A longed?

Sugary drink varies according to the normal distribution : Brittany's measured glucose level one hour after ingesting the sugary drink varies according to the Normal distribution with µ = 125 mg/dland s = 10 mg/dl.

User Account

All Pages