The Johnny Pickles Brewing Company has been successful as a small craft microbrewery with a focus on distributing its products to bars and restaurants. They are considering a bottling line that will allow them to start distributing to grocery and party stores. The equipment will cost $80,286 to purchase. It's expected that additional sales will be $26,186 per year while variable expenses are expected to increase $4,023 annually. The equipment is expected to last 5 years and will need a one time overhaul in year 3 that will cost $8,158. It will have no salvage value at the end of its useful life. The Johnny Pickles Brewing Company uses a discount rate of 12% when deciding to accept a project. What is the net present value of the project? Round your answer to the whole dollar. If the NPV is negative, enter as a negative. If it's positive, enter as a positive.
The Johnny Pickles Brewing Company has been successful as a small craft microbrewery with a focus on distributing its products to bars and restaurants. They are considering a bottling line that will allow them to start distributing to grocery and party stores. The equipment will cost $80,286 to purchase. It's expected that additional sales will be $26,186 per year while variable expenses are expected to increase $4,023 annually. The equipment is expected to last 5 years and will need a one time overhaul in year 3 that will cost $8,158. It will have no salvage value at the end of its useful life. The Johnny Pickles Brewing Company uses a discount rate of 12% when deciding to accept a project. What is the net present value of the project? Round your answer to the whole dollar. If the NPV is negative, enter as a negative. If it's positive, enter as a positive.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 30
The Johnny Pickles Brewing Company has been successful as a small craft
microbrewery with a focus on distributing its products to bars and restaurants. They
are considering a bottling line that will allow them to start distributing to grocery and
party stores. The equipment will cost $80,286 to purchase. It's expected that
additional sales will be $26,186 per year while variable expenses are expected to
increase $4,023 annually. The equipment is expected to last 5 years and will need a
one time overhaul in year 3 that will cost $8,158. It will have no salvage value at the
end of its useful life. The Johnny Pickles Brewing Company uses a discount rate of
12% when deciding to accept a project. What is the net present value of the project?
Round your answer to the whole dollar. If the NPV is negative, enter as a negative. If
it's positive, enter as a positive.
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