Posted by **Toby** on Friday, December 17, 2010 at 3:42pm.

It's January 1, 2011. Company XYZ wants to build a teddy bear factory. They have already spent $10 million dollars in the past year building the factory, and expect to spend $10 million dollars per year for the next 4 years, to be paid on December 31st each year (assume the first of these 4 payments occurs on December 31, 2011). On January 1, 2015, they will start selling the teddy bears and make exactly $70 million dollars in profit, received on December 31, 2015. On January 1, 2016 the company shuts down forever (no additional cash flows). The discount rate for this project is 10%.

What is the current NPV of this project (MM is in millions)? *

## Answer This Question

## Related Questions

- finance - A company wants to build a new factory for increased capacity. Using ...
- Finance - A company wants to build a new factory for increased capacity. Using ...
- Finance - Rock Company acquired land 8 years ago for 2.2 million. Today it is ...
- Corporate Finance - A company wants to build a new factory for increased ...
- Math Accounting - Determine the proposal’s appropriateness and economic ...
- Statistics - A household appliance manufacturer wants to analyze the ...
- Finance - A rich man has 1 million dollars in the bank earning 7% interest. He ...
- finance - Thelma and Louie's Inc started the year with a balance of retained ...
- Finance - Your program has a proposed RDT&E-funded project scheduled to start in...
- math - Billy Jeans' profit is given by the equation y=2.7-.0000015(x-2550)^2, ...

More Related Questions