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Revenues generated by a new fad product are forecast as follows: Year Revenues 1 45000...

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Finance

Revenues generated by a new fad product are forecast as follows:

Year Revenues

1 45000

2 35000

3 25000

4 20000

Expenses are expected to be 40% of revenues, and working capital required in each year is expected to be 20% of revenues in the following year. The product requires an immediate investment of $60,000 in plant and equipment.

c. If the opportunity cost of capital is 12%, what is the project's NPV?

d. What is project IRR?

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