If the price needs to be adjusted, what’s the lowest the product could be offered and still have a positive NPV (keeping all other assumptions the

If the price needs to be adjusted, what’s the lowest the product could be offered and still have a positive NPV (keeping all other assumptions the same)

Marketing study                     $100,000

New PDA cost                                    $200,000

Fixed Cost                             $2.1 million

Estimated sales per year:

Year 1 – $75,000

Year 2 – $85,000

Year 3 – $80,000

Year 4 – $70,000

Year 5 – $65,000

Unit price of new product     $240

Equipment                              $10.5 million

Value of equipment in 5 years – $1.1 million

Networking Capital               22%  No initial outlay for NWC

Corporate tax                        30%

Required return                      10%