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What is the NPV and should you start the COVset project

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Question - Your company manufacturers masks. Given you think COVID is ending, you are worried about the company. You spend some time thinking about new products that would need mask-type cloth and string and have an idea: You'll use those materials to make corsets for people that put on weight during the pandemic. You'll name them "COVsets." To make the COVsets, you need to spend $1,500,000 retooling your equipment today. You think you can make $75,000 per quarter for the 24 consecutive quarters starting TODAY at which point everyone will have lost their extra weight. If your company has a discount rate of 8% compounded quarterly, what is the NPV and should you start the COVset project?

Reference no: EM132993352

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