Bravo Pty Ltd is considering the addition of a new product line. The new product will require an initial capital outlay of $70 000 and is expected to have a five-year life cycle. The manager estimates that because of the new product, cash flow will increase over the next five years by the following amounts.
If Bravo's hurdle rate is 14 per cent, calculate the net present value of the new product line. (Income taxes can be ignored.)

Question

Bravo Pty Ltd is considering the addition of a new product line. The new product will require an initial capital outlay of $70 000 and is expected to have a five-year life cycle. The manager estimates that because of the new product, cash flow will increase over the next five years by the following amounts. 
If Bravo's hurdle rate is 14 per cent, calculate the net present value of the new product line. (Income taxes can be ignored.)

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The Answer of Bravo Pty Ltd is considering the addition of a new product line. The new product will require an initial capital outlay of $70 000 and is expected to have a five-year life cycle. The manager estimates that because of the new product, cash flow will increase over the next five years by the following amounts. 
If Bravo's hurdle rate is 14 per cent, calculate the net present value of the new product line. (Income taxes can be ignored.)

Bravo Pty Ltd Is Considering the Addition of a New