You developed a new product for your company this year, and the completed development project cost is just $700,000. The
Posted: Wed May 04, 2022 8:17 am
You developed a new product for your company this year, and the
completed development project cost is just $700,000. The new
product brought in revenue this year of only $80,000 this year, but
is expected to bring in revenue of $150,000 per year for five more
years.
a. draw a cash flow diagram for this story.
b. what is the NPV of this overall project if the discount rate
is 5%
c. what is the NPV of this overall project if the discount rate
is 10%
d. based on your results so far, do you actually think this
project's a success? why or why not?
e. if you decide to pursue this project or another project with
an internal rate of return (IRR) of 5%, which would you choose and
why?
completed development project cost is just $700,000. The new
product brought in revenue this year of only $80,000 this year, but
is expected to bring in revenue of $150,000 per year for five more
years.
a. draw a cash flow diagram for this story.
b. what is the NPV of this overall project if the discount rate
is 5%
c. what is the NPV of this overall project if the discount rate
is 10%
d. based on your results so far, do you actually think this
project's a success? why or why not?
e. if you decide to pursue this project or another project with
an internal rate of return (IRR) of 5%, which would you choose and
why?