Quick Serve produced 100 units of popular ice cream makers this year (0). The cost of production for the ice cream makers is $2,000 per unit. It will sale 50 units next year at a price of$2,750 per unit, and the other 50 units at a price of $3,000 per unit in two years. It takes a full year for it to collect its bills from the customers. Ignore tax, or possible sales in earlier or later years.
a) Please calculate the net income each year for Quick Serve, from year 0 to year 3.
b) What is Quick Serve’s net working capital in each year from year 0 to year 3, and what is the change in net working capital each year?
c) What are the cash flows in each year from year 0 to year 3?
d) Assuming a discount rate of 9%. Please calculate the NPV for this project.
e) What is the IRR for this project?
f) What is the payback period?
g) What is the discounted payback period?
h) What is the profitability index?