question archive With the growing popularity of casual surf print clothing, two recent MBA graduates decided to broaden this casual surf concept to encompass a "surf lifestyle for the home
With the growing popularity of casual surf print clothing, two recent MBA graduates decided to broaden this casual surf concept to encompass a "surf lifestyle for the home
Subject:FinancePrice: Bought3
With the growing popularity of casual surf print clothing, two recent
MBA graduates decided to broaden this casual surf concept to encompass a "surf lifestyle for the home." With limited capital, they decided to focus on surf print table and floor lamps to accent people's homes. They projected unit sales of these lamps to be 10,400 in the first year, with growth of 8 percent each year for the next five years. Production of these lamps will require $34,000 in inventory, $16,000 in Accounts Payable, and $5,000 in Accounts Receivable. Total fixed costs are $125,000 per year, variable production costs are $19 per unit, and the units are priced at $61 each. The equipment needed to begin production will cost $575,000. The equipment will be depreciated using the straight-line method over a 7-year life and is not expected to have a salvage value. The tax rate is 21% and the required rate of return is 18%. Find the NPV of this project.
