{"id":144663,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/a-manufacturing-company-is-thinking-of-launching-a-new-product-2"},"modified":"2017-08-17T16:55:25","modified_gmt":"2017-08-17T16:55:25","slug":"a-manufacturing-company-is-thinking-of-launching-a-new-product-2","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/a-manufacturing-company-is-thinking-of-launching-a-new-product-2\/","title":{"rendered":"A manufacturing company is thinking of launching a new product\u2026"},"content":{"rendered":"<p>A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 45% of sales. Indirect incremental costs are estimated at $95,000 a year. The project requires a new plant that will cost a total of $1,500,000, which will be a depreciated straight line over the next 5 years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000.<\/p>\n<p>Assume there is no need for additional investment in building the land for the project. The firm\u2019s marginal tax rate is 35%, and its cost of capital is 10%.<\/p>\n<p>To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at financial values.<\/p>\n<p><strong>Assignment Guidelines<\/strong><\/p>\n<ul>\n<li>Using the information in the assignment description:\n<ul>\n<li>Prepare a statement showing the incremental cash flows for this project over an 8-year period.<\/li>\n<li>Calculate the payback period (P\/B) and the net present value (NPV) for the project.<\/li>\n<li>Answer the following questions based on your P\/B and NPV calculations:\n<ul>\n<li>Do you think the project should be accepted? Why?\n<ul>\n<li>Assume the company has a P\/B (payback) policy of not accepting projects with life of over 3 years.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 45% of sales. <a href=\"https:\/\/www.benedictsol.com\/blogs\/a-manufacturing-company-is-thinking-of-launching-a-new-product-2\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-144663","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/144663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=144663"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/144663\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=144663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=144663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=144663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}