(Ignore income taxes in this problem.) Gallatin, Inc., has assembled the estimates shown below relating to a proposed new product. These estimates are based on a 5-year project life, at the end of which the new equipment would be sold, working capital would revert to other uses in the company, and the product would be discontinued. Gallatin uses a discount rate of 10%.
Required:
Compute the net present value of the new product.

Question

(Ignore income taxes in this problem.) Gallatin, Inc., has assembled the estimates shown below relating to a proposed new product. These estimates are based on a 5-year project life, at the end of which the new equipment would be sold, working capital would revert to other uses in the company, and the product would be discontinued. Gallatin uses a discount rate of 10%.
  Required:
Compute the net present value of the new product.

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The Answer of (Ignore income taxes in this problem.) Gallatin, Inc., has assembled the estimates shown below relating to a proposed new product. These estimates are based on a 5-year project life, at the end of which the new equipment would be sold, working capital would revert to other uses in the company, and the product would be discontinued. Gallatin uses a discount rate of 10%.
  Required:
Compute the net present value of the new product.

(Ignore Income Taxes in This Problem