Essay
The Nu-Tech Company has a new project available to it at a cost of £6,000,000.The project that they can sell 13,000 personal organizers at £172 in net cash flow for each of the next five years.Nu-Tech's discount rate is 15%.What is the NPV of the investment?
The executives of Nu-Tech are concerned about the potential of future competition and a subsequent drop in sales and price.If after two year you can dispose of the asset for £1,000,000 at what price would it make sense to abandon the project?
Correct Answer:
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NPV = £-6,000,000 + (£13,000 x 172)A.15,5 = £...View Answer
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