Come up with a new product-calculate the npv

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Reference no: EM131992003

Chips Inc. has come up with a new product. Chips paid $145503 for a marketing survey to determine the viability of the product. It is felt that the product will generate sales of $732869 per year. The fixed costs associated with this will be $198435 per year, and variable costs will amount to 29 percent of sales. The equipment necessary for production of the product will cost $866847 and will be depreciated in a straight-line manner for the four years of the product life. This is the only initial cost for the production. Chips is in a 39 percent tax bracket and has a required return of 13 percent. Calculate the NPV. Answer in $ to two decimals.

Reference no: EM131992003

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