Module 2 Q 11

.xlsx
School
Fairleigh Dickinson University **We aren't endorsed by this school
Course
DSCI 6700
Subject
Finance
Date
Oct 15, 2023
Pages
7
Uploaded by CountExploration12005 on coursehero.com
Perot Corporation NPV unders scenario a $9,961 thousands NPV unders scenario b $15,861 thousands NPV unders scenario c $9 thousands Best case scenario and most profitable is answer b, worst case scenario and not profitable is scenario c
Perot Corporation PATAY 2 CHIP PRODUCT ESTIMATES Development Cost $20,000,000 Pilot Testing $5,000,000 Debug $3,000,000 Ramp-up Cost $3,000,000 Advance Marketing $5,000,000 Marketing and Support Cost $1,000,000 per year Unit Production Cost Year 1 $655.00 Unit Production Cost Year 2 $545.00 Unit Price Year 1 $820.00 Unit Price Year 2 $650.00 Sales and Production Volume Year 1 250,000 Sales and Production Volume Year 2 150,000 Interest Rate 10% Project Schedule Year 1 Year 2 Year PATAY2 CHIP 1st 2nd 1st 2nd 1st Time Index 1 2 3 4 5 Development Cost $5,000,000 $5,000,000 $5,000,000 $5,000,000 Pilot Testing $2,500,000 $2,500,000 Debug $1,500,000 $1,500,000 Ramp-up Cost $3,000,000 Advance Marketing $5,000,000 Marketing and Support Cost $500,000 Sales and Production $20,625,000 Net Cash Flow ($5,000,000) ($5,000,000) ($9,000,000) ($17,000,000) $20,125,000 Disc Factor 0.9524 0.9070 0.8638 0.8227 0.7835 Present Value ($4,761,905) ($4,535,147) ($7,774,538) ($13,985,942) $15,768,464 NPV $9,961 thousands
r 3 Year 4 2nd 1st 2nd 6 7 8 $500,000 $500,000 $500,000 $20,625,000 $7,875,000 $7,875,000 $20,125,000 $7,375,000 $7,375,000 0.7462 0.7107 0.6768 $15,017,585 $5,241,275 $4,991,690
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