Question:
The Tuff Wheels was getting ready to start their development project for a new product to be added to their small motorized vehicle line for children. The new product is called Kiddy Dozer. It will look like a miniature bulldozer, complete with caterpillar tracks and a blade. Tuff Wheels has forecasted the demand and the cost to development and produce the new Kiddy Dozer.
Q1. What are the yearly cash flows and their present value (discounted at 8%) of this project? What is the net present value?
Q2. What is the impact on NPV for the Kiddy Dozer if the actual sales are 50,000 per year or 70,000 per year?
Q3. What is the effect caused by changing the discount rate to 9%, 10%, or 11%
Attachment:- Impact on NPV for the Kiddy Dozer.rar