BathGate Group Has Just Completed Its Analysis of a Project

question 63

Essay

BathGate Group has just completed its analysis of a project.The CFO has presented the following information to the Board of Directors:
The initial cost of the project is $15,000.Sales are expected to be 10,000 units in year one and are expected to grow by 5% per year forever.In year one, they expect to sell units for $2 each and foresee no real change in unit price.Variable and fixed costs are zero.
The firm's required rate of return is 8%.The corporate tax rate is 30%.Assume the CCA rate is zero.
a)Calculate the NPV of this project if there is zero inflation forecast.
b)Calculate the NPV of this project if inflation is forecasted to be 2% per year.Assume the required rate of return is nominal at 8%.
c)Calculate the NPV of this project if inflation is forecasted to be 2% per year and the firm requires a real rate of return of 8%.

Grasp effective strategies for taking different types of tests and improving academic skills.

Recognize the role and characteristics of different psychological perspectives and their practitioners.

Appreciate the empirical basis of psychological research.

Understand the contribution of pioneering female psychologists to the field and society.

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Definitions:

Ball-and-Socket Joint

A highly mobile joint in which a spherical end of one bone fits into a round socket of another, allowing for movement in multiple directions.

Glenohumeral

Referring to the glenohumeral joint, the ball and socket joint where the arm (humerus bone) connects to the shoulder blade (scapula).

Atlanto-axial

Pertaining to the joint formed between the atlas (first cervical vertebra) and the axis (second cervical vertebra) which enables head rotation.

Acetabular Labrum

A ring of cartilage surrounding the socket of the hip joint that helps to improve the stability of the joint.