The Meldrum Co. expects to sell 3,510 units, 16 percent, of a new product....
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The Meldrum Co. expects to sell 3,510 units, 16 percent, of a new product. The variable cost per unit is $6, 9 percent, and the annual fixed costs are $11,700, 4 percent. The sale price is $18 a unit, 8 percent. The project requires $24,850 of fixed assets which will be depreciated straight-line to zero during the six-year project, and can't be salvaged at the project's conclusion. Also required is $9,900 of net working capital for the life of the project. The tax rate is 21 percent and the required rate of return is 13 percent. What is the net present value of the pessimistic scenario?
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