Find what is the npv of the project for company

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Reference no: EM133000281

To help the new company, Sam is going to tell the marketing department how many pairs of shoes they would need to sell if they develop their new Brand. He get the following Data:

Initial Investment in Plant and Equipment $31,000,000

Marketing and Sales Support Expense (Yr 1-4) Starts at $4,260,000 and decreases by 25% per year as product becomes more well known in the market.

Net Contribution Margin (Yr 1-5), Starts at 5,750,000 and increases by 20% per year through year 5, then stays steady at the year 5 amount for life of the project.

Problem 1: If the project life is 8 years and the company's MARR is 11.8%, what is the NPV of this project?

Reference no: EM133000281

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