Revenues generated by a new fad product are forecast as follows: Year Revenues 1 45000...
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Finance
Revenues generated by a new fad product are forecast as follows:
Year Revenues
1 45000
2 35000
3 25000
4 20000
Expenses are expected to be 40% of revenues, and working capital required in each year is expected to be 20% of revenues in the following year. The product requires an immediate investment of $60,000 in plant and equipment.
c. If the opportunity cost of capital is 12%, what is the project's NPV?
d. What is project IRR?
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