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

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Accounting

Revenues generated by a new fad product are forecast as follows: Year Revenues 1 $ 52,000 2 30,000 3 20,000 4 10,000 Thereafter 0 Expenses are expected to be 50% of revenues, and working capital required in each year is expected to be 30% of revenues in the following year. The product requires an immediate investment of $54,000 in plant and equipment. Required: What is the initial investment in the product? Remember working capital. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firms tax rate is 30%, what are the project cash flows in each year? If the opportunity cost of capital is 12%, what is project NPV? What is project

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