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How calculate the net present value of the project

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Reference no: EM132590488

Question 1: A company is evaluating a new product proposal that will last 6 years. The initial outlay is RM2 million. The proposed product selling price is RM220 per unit and the variable costs are RM55 per unit and sales are planned to be 2,750 units each year. The incremental cash fixed costs for the product will be RM3,750 per annum. The cost of capital is 10% where its cumulative discount (annuity) factor for six years at 10% is 4.355. Calculate the Net Present Value of this project.

Option A RM40,250

Option B -RM40,250

Option C RM190,600

Option D -RM190,600

Reference no: EM132590488

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