Roosters Cash Flow Question

Roosters Cash Flow Question - FINS 1613 BUSINESS FINANCE...

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FINS 1613 B USINESS F INANCE Session 1, 2011 Lecture 6 Practice Problem The Sydney Roosters are considering selling ofFcially licensed actual roosters, which will be genetically enhanced to sing “Roosterman” on game day. The biotech research ensures that the project will have signiFcant upfront costs as the commercial need for a singing chicken has never been recognized before. However, the project will later generate positive cash ±ows as each supporter faithfully adopts his or her own rooster. ²or some reason, the project has a three-year life. Details to compute the project incremental cash ±ows are given below: A. The team expects to sell 20,000 roosters in the Frst year. Sales are expected to grow by 40% each year until the third year. Rooster will sell for $100. B. Variable costs, such as chicken coop maintenance and feed costs, are expected to be $10 per each rooster sold. C. The team will hire:
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This note was uploaded on 09/23/2011 for the course FINS 1613 taught by Professor Drkhshim during the One '10 term at University of New South Wales.

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