X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $167,000 in each of the first two years and $102,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $92,000. New manufacturing equipment will have to be purchased for $320,000; it will have zero disposal value at the end of the four years. Assuming a discount rate of 7%, what is the net present value of launching the new product?
Solution:
X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indic...
X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $157,000 in each of the first two years and $114,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $91,000. New manufacturing equipment will have to be purchased for...
X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $167,000 in each of the first two years and $114,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $81,000. New manufacturing equipment will have to be purchased for...
X Company is planning to launch a new product. A market research study, costing $170,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $151,000 in each of the first two years and $109,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $87,000. New manufacturing equipment will have to be purchased for...
X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $151,000 in each of the first two years and $109,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $90,000. New manufacturing equipment will have to be purchased for...
X Company is planning to launch a new product. A market research study, costing $150,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $151,000 in each of the first two years and $107,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $78,000. New manufacturing equipment will have to be purchased for...
X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $161,000 in each of the first two years and $120,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $75,000. New manufacturing equipment will have to be purchased for...
X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $179,000 in each of the first two years and $107,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $75,000. New manufacturing equipment will have to be purchased for...
X Company is planning to launch a new product. A market research study, costing $150,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $174,000 in each of the first two years and $106,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $92,000. New manufacturing equipment will have to be purchased for...
X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $177,000 in each of the first two years and $117,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $87,000. New manufacturing equipment will have to be purchased for...