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## Finance

 Basic Finance Corporate Finance Financial Management Financial Econometrics Portfolio Management Risk Management Public Finance Business Law & Ethics

1) Unique’s Clothes Fashions can invest= \$6 million in the new plant for manufacturing invisible makeup. Plant has the expected life of five years, and expected sales are= 7 million jars of makeup a year. Fixed costs are= \$2.2 million a year, and variable costs are= \$1.8 per jar. Product will be worth at= \$2.6 per jar. Plant will be declined straight-line over five years to salvage value of zero. Opportunity cost of capital is= 10%, and tax rate is= 30%.

a) Determine the project NPV under these base-case suppositions?

b) Find out NPV if variable costs turn out to be= \$2 per jar?

c) Compute the NPV if fixed costs turn out to be= \$1.7 million per year?

d) At what price per jar would project NPV equal 0?

Basic Finance, Finance

• Category:- Basic Finance
• Reference No.:- M915123

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