Asked by Toby
It's January 1, 2011. Company XYZ wants to build a teddy bear factory. They have already spent $10 million dollars in the past year building the factory, and expect to spend $10 million dollars per year for the next 4 years, to be paid on December 31st each year (assume the first of these 4 payments occurs on December 31, 2011). On January 1, 2015, they will start selling the teddy bears and make exactly $70 million dollars in profit, received on December 31, 2015. On January 1, 2016 the company shuts down forever (no additional cash flows). The discount rate for this project is 10%.
What is the current NPV of this project (MM is in millions)? *
What is the current NPV of this project (MM is in millions)? *
Answers
Answered by
Robin
Production budget
Jan-Mar April-June July-Sept Oct-Dec 2011
Qty to be sold 1080000 1360000 980000 1100000 4520000
add Ending Inventory 136000 98000 110000 120000 120000
less openng inventory -94500 -136000 -98000 -110000 -94500
Qty to be produced 1121500 1322000 992000 1110000 4545500
Jan-Mar April-June July-Sept Oct-Dec 2011
Qty to be sold 1080000 1360000 980000 1100000 4520000
add Ending Inventory 136000 98000 110000 120000 120000
less openng inventory -94500 -136000 -98000 -110000 -94500
Qty to be produced 1121500 1322000 992000 1110000 4545500
There are no AI answers yet. The ability to request AI answers is coming soon!
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.