Testco corporation is considering adding a new product line


Testco Corporation is considering adding a new product line. The cost of the factory and equipment to produce this product is $1,890,000. Company management expects net cash flows from the sale of this product to be $550,000 in each of the next eight years.

If Testco uses a discount rate of 11 percent for projects like this, what is the net present value of this project?

What is the internal rate of return?

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Financial Management: Testco corporation is considering adding a new product line
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