Pappys Potato has come up with a new product, the Potato Pet (they are freeze-dried...
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Pappys Potato has come up with a new product, the Potato Pet they are freezedried to last longer Pappys paid $ for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $ per year. The fixed costs associated with this will be $ per year, and variable costs will amount to percent of sales. The equipment necessary for production of the Potato Pet will cost $ and will be depreciated in a straightline manner for the four years of the product life as with all fads, it is felt the sales will end quickly This is the only initial cost for the production. The tax rate is percent and the required return is percent. Calculate the payback period, NPV and IRR.
Pappys Potato has come up with a new product, the Potato Pet they are freezedried to last longer Pappys paid $ for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $ per year. The fixed costs associated with this will be $ per year, and variable costs will amount to percent of sales. The equipment necessary for production of the Potato Pet will cost $ and will be depreciated in a straightline manner for the four years of the product life as with all fads, it is felt the sales will end quickly This is the only initial cost for the production. The tax rate is percent and the required return is percent.
Calculate the payback period, NPV and IRR.
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