(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.

Quizplus · Accepted Answer

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