What would be the value of product line

Assignment Help Financial Management
Reference no: EM132000814

Entrepreneurial Inc. is evaluating a new product launch that will cost it $26982 to launch. The company projects it will generate $693529 in annual operating cash flow at the end of each of the next 3 years, after which it will discontinue the product. The appropriate discount rate for the product is 16%.

If after the first year, the product is doing worse than expected, then the company projects annual cash flows will only be $395593 for the remaining two years of the project. What would be the value of the product line at that time (i.e. one year from now) in such a case?

Reference no: EM132000814

Questions Cloud

Competitiveness in the japanese market : What had been the impact on Pepkoe’s competitiveness in the Japanese market?
Assessing the viability of operating amusement park : You are assessing the viability of operating an amusement park. The company will not pay any taxes. The business will continue into perpetuity.
Calculate the required rate of return for un-levered firm : Calculate the required rate of return for the un-levered firm. Calculate the market value of the firm using proposition I.
Expected price per share after the offering is completed : what is the value of one right and what is the expected price per share after the offering is completed?
What would be the value of product line : What would be the value of the product line at that time (i.e. one year from now) in such a case?
Stock options that depend on the firm performance : Should the compensation consist of a dollar salary, stock options that depend on the firm’s performance, or a mix of two? If “performance” is to be considered,
What is holding period return on investment : What is the holding period return on an investment over 3 years, if in the first year the return was 5.2%, the second year it was -10% and in the third year the
Winning harrier jet was not realistic prize option : It was an example of "puffery" and that winning a Harrier Jet was not a realistic prize option?
What will be the new value of the firm : If the company permanently changes to the new capital structure, what will be the new value of the firm?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd