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-Spent $750,000 to develop a new PDA -Spent an add...




-Spent $750,000 to develop a new PDA -Spent an additional $200,000 for marketing study to determine the expected sales. -Can manufacture the new PDA with variable cost of $185.00 each. -Fixed Costs for the operation are estimated at $5.3 million per year. -Unit Price $480.00 each -Necessary equipment to produce the PDA will cost $38.5million, with depreciation for 7 years (MACRS Schedule) -It is believed that this equipment after 5 years will be worth $5.4 million. -NWC will be 20% of Sales -Changes in NWC will occur in Year 1, with the first year sales. -Conch Republic Corporate Tax Rate is 35% and has a 12% required return. -Estimated sales volume per year is: 1. 74,000 2. 95,000 3. 125,000 4. 105,000 5. 80,000 Question: 1) How sensitive is the NPV to changes in the price of the new smart phone? (Show all calculations),Hi, I think that I put 9/1 as the deadline however, I meant to put 8/4 is this going to be an issues? Thanks for your help.


Paper#6944 | Written in 18-Jul-2015

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