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Salsk061 [2.6K]
3 years ago
9

Southern california publishing company is trying to decide whether or not to revise its popular textbook, financial psychoanalys

is made simple. the company has estimated that the revision will cost $90,000. cash flows from increased sales will be $21,600 the first year. these cash flows will increase by 4 percent per year. the book will go out of print five years from now. assume that the initial cost is paid now and revenues are received at the end of each year.

Business
1 answer:
steposvetlana [31]3 years ago
8 0

If the company requires a return of 10 percent for such an investment, calculate the present value of the project.

The present value of the project is $72349.51.

Since we consider only incremental cash flows for a project, we consider $21,600 for year one and calculate a 4% increase for each of the additional years.

We then calculate the Present Value Interest Factor (PVIF) at 10% for four years using the formula :

PVIF = 1 / [(1+r)^n]

Next, we find the product of the respective cash flows and PVIF for each year.

Finally, we find the total of the discounted cash flows for the four years to find the Present Value of the project.

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What is an exchange rate? A. How much bonds are worth when they're exchanged with cash B. How much dollars are worth when they a
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Answer:

Unitary cost= $118

Explanation:

Giving the following information:

Production= 43,000

Direct materials $43.00 per unit

Direct manufacturing labor $8.00 per unit

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Fixed manufacturing costs $63.00 per unit

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