Godo DQuestion 30The Johnny Pickles Brewing Company has been successful as a small craftmicrobrewery with a focus on distributing its products to bars and restaurants. Theyare considering a bottling line that will allow them to start distributing to grocery andparty stores. The equipment will cost $80,286 to purchase. It's expected thatadditional sales will be $26,186 per year while variable expenses are expected toincrease $4,023 annually. The equipment is expected to last 5 years and will need aone time overhaul in year 3 that will cost $8,158. It will have no salvage value at theend of its useful life. The Johnny Pickles Brewing Company uses a discount rate of12% when deciding to accept a project. What is the net present value of the project?Round your answer to the whole dollar. If the NPV is negative, enter as a negative. Ifit's positive, enter as a positive.

NPV is also known as Net Present Value. It is a capital budgeting tehcniques which help in decision…

Answered: The Johnny Pickles Brewing Company has…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

Section: Chapter Questions

Problem 1EP

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