Question

X Company is planning to launch a new product. A market research study, costing $130,000, was conducted last year, indicatingPresent Value of $1.00 Period 3% 7% 4% 5% 8% 11% 12% 6% 9% 10% 0.952 1 0.971 0.962 0.943 0.935 0.926 0.917 0.909 0.901 0.893

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Answer #1
Now 1 2 3 4
Manufacturing Equipment -360000
Advertising -90000
Annual Profits 161000 161000 104000 104000
Total cash flows -450000 161000 161000 104000 104000
X PV factor 6% 1 0.943 0.890 0.840 0.792
Present value of cash flows -450000 151823 143290 87360 82368
Net Present value 14841
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