What is the expected npv for this new machine over ten, Ask an Expert

Economics

R&D planning. A firm is in the process of assessing the economic prospects for a new bottling machine it is developing. Future research and development expenses could range from $4 to $9 million, with a most likley value around 7$ million. The life of the product will be anywhere from 3 to 10 years. Yearly unit sales will range from 100 to 500, with a most likley value around 300. the machines will sell for between $20,000 and $25,000 each. The production cost of the machine is expected to be $13,000, but could be as low as $11,000 or as high as $15,000. The firm's discount rate is 10 percent.

A what is the expected NPV for this new machine over ten years?

B. what is the probability of a positive NPV?

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M9444670

Have any Question?Write your Review or question?

Related Questions in Business Economics

Suppose that tucker industries has annual sales of 580

Suppose that Tucker Industries has annual sales of $5.80 million, cost of goods sold of $2.86 million, average inventories of $1,165,000, and average accounts receivable of $580,000. Assuming that all of Tucker's sales a ...

One study based on responses from 1 013 randomly selected

One study, based on responses from 1, 013 randomly selected teenagers, concluded that 43% of teenagers cite grades that their greatest source of pressure. Use a 0.05 significance level to test the claim that fewer than h ...

Suppose there is no inflation and an insurance company

Suppose there is no inflation and an insurance company offers a contract that would pay $500,000 with certainty 50 years from now. What is the most that this contract would be worth today if: 1. The rate of interest is 7 ...

Questionuse the data in the table which lists drive-thru

Question: Use the data in the table, which lists? drive-thru order accuracy at popular fast food chains. Assume that orders are randomly selected from those included in the table. Restaurant A- Order accurate - 331 Orde ...

How might profit maximization lead to higher demand for

How might profit maximization lead to higher demand for female workers and result in female workers earning higher wages than male workers in the same firm?

At a college the scores on the chemistry final exam are

At a college the scores on the chemistry final exam are approximately normally distributed, with a mean of 75 and a standard deviation of 15. The scores on the calculus final are also approximately normally distributed, ...

An article in the wall street journal noted that an

An article in The Wall Street Journal noted that an" increase in the price of crude oil quickly reduces demand for oil". Do you agree with this statement? Briefly explain.

A bag contains 15 red marbles and 13 blue marbles two

A bag contains 15 red marbles and 13 blue marbles. Two marbles are randomly drawn without replacement. Find the probability that both marbles are red.

Suppose a retailer claims that the average wait time for a

Suppose a retailer claims that the average wait time for a customer on its support line is 179 seconds. A random sample of 57 customers had an average wait time of 169 seconds. Assume the population standard deviation fo ...

Why does a government undertakes expansionary fiscal

Why does a government undertakes expansionary fiscal policy? What are the problems of undertaking expansionary fiscal policy? When is fiscal policy more appropriate than monetary policy?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Business Economics Expert