skip to Main Content

Thanks to acquisition of a key patent, your company now has exclusive production

Thanks to acquisition of a key patent, your company now has exclusive production rights for barkelgassers (BGs) in North America. Production facilities for 230,000 BGs per year will require a $24.3 million immediate capital expenditure. Production costs are estimated at $81 per BG. The BG marketing manager is confident that all 230,000 units can be sold for $116 per unit (in real terms) until the patent runs out five years hence. After that the marketing manager hasn’t a clue about what the selling price will be. Assume the real cost of capital is 14%. To keep things simple, also make the following assumptions:What is the NPV of the BG project? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)Net present value  _____________          $ million 

GET HELP WITH THIS PAPER TODAY

Do you need help working on this assignment? We will write a custom essay on this or any other topic specifically for you.

Back To Top