X Company is considering launching a new product. After conducting a market research study that...
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X Company is considering launching a new product. After conducting a market research study that cost $5,000, the company estimates sales of 8,200 units in each of the next 4 years, with a contribution margin of $6.10 per unit. Additional fixed costs will be $14,590. Equipment costing $120,000 will have to be purchased; the equipment will have no salvage value at the end of 4 years.
What is the internal rate of return of launching the new product? (Write your rate as a decimal: .XX)
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