Concept to encompass surf lifestyle for the home

Assignment Help Financial Management

Reference no: EM131868396

With the growing popularity of casual surf print clothing, two recent MBA graduates decided to broaden this casual surf concept to encompass a “surf lifestyle for the home.” With limited capital, they decided to focus on surf print table and floor lamps to accent people’s homes. They projected unit sales of these lamps to be 9,000 in the first year, with growth of 7 percent each year for the following four years (Years 2 through 5). Production of these lamps will require $55,000 in networking capital to start. Total fixed costs are $115,000 per year, variable production costs are $24 per unit, and the units are priced at $52 each. The equipment needed to begin production will cost $195,000. The equipment will be depreciated using the straight-line method over a five-year life and is not expected to have a salvage value. The effective tax rate is 40 percent, and the required rate of return is 25 percent. What is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131868396

Questions Cloud

What corporate social responsibility theory would operating : Would you be for leaving the product on the shelf because you feel your duty as a corporate manager is to maximize shareholder profits?

Averages of filtered data in excel : How do you count and take averages of filtered data in excel? I keep trying to use the COUNT and AVERAGE functions

Estimate of the standard deviation of change in stock : If the annualized volatility (i.e. standard deviation) of a stock is 15%, what is the estimate of the standard deviation of change in stock price in one week.

Difference between the purchase price and the selling price : The latter case finds the difference between the purchase price and the selling price. If the difference is negative (in minus) the text prints: Here something

Concept to encompass surf lifestyle for the home : two recent MBA graduates decided to broaden this casual surf concept to encompass a “surf lifestyle for the home.”

How accessing the web is done not only from desktop computer : Discuss how accessing the Web is done not only from desktop computers and laptops, but from mobile devices, such as smartphones and tablets.

Develop a three-year hr forecast : Labor supply/demand will become more rigorous (demand for workers will increase, but the labor pool will remain the same or shrink). Labor costs will increase.

The present value today of deferred annuity : The present value today of this deferred annuity is: Use Appendix B and Appendix D.

Develop erd and the relational schema : Develop ERD and the relational schema.Define entities and relationships. Provide the business rules of the ERD.

User Account

All Pages