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Healthy Food Inc. is considering introducing a new line of dried flowers. The firm expects to be able to generate $ 4 million in revenue from this new line, each year for the next 10 years, Customers who come to buy the flowers are expected to buy the firm's traditional offerings (fresh fruit and baked goods) and it is anticipated that the annual revenue on these goods will increase as a result of these extra purchases from $14 million to $17 million, as a consequence. The firm has a 60% pre tax operating margin on all of its products. Assuming a 8-year life. A 10% cost of capital, a 40% tax rate and no salvage value or depreciation. What is the present value of this project when the side benefits are considered.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92818564

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