Business, 06.05.2020 02:44 cristianc52

Carsen Sorensen, controller of Thayn Company, just received the following data associated with production of a new product: 1. Expected annual revenues: $750,000. 2. Projected product life cycle: five years. 3. Equipment: $800,000 with a salvage value of $100,000 after five years. 4. Expected increase in working capital: $100,000 (recoverable at the end of five years). 5. Annual cash operating expenses: estimated at $450,000. 6. Required rate of return: 8 percent. Required:.1. Estimate the annual cash flows for the new product. 2. Using the estimated annual cash flows, calculate the NPV 3. What if revenues were overestimated by $15D,000?

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Carsen Sorensen, controller of Thayn Company, just received the following data associated with produ...

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