document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1089632>Question 1089632</A>: <I><SPAN STYLE=\"word-break: break-all;\"> (b)	Given your interest in sports and computers, you are considering establishing a computer games development business. You would like to run the business for the next 5 years and your required return is 18%. You would need hardware worth around $200 000 to start development and production of your first game ‘Super Hoop Croquet’. The equipment would be scrapped at the end of the project.<BR>\n" );
document.write( "You have decided to locate your business in a regional centre rather than the city in order to lower rental costs. Your annual rent will be $30 000. The going rate for programmers in the area is $70 000 p.a. and you would employ 4 of these.<BR>\n" );
document.write( "Sales for the first year are expected to be 3 700 units. Sales in units are expected to grow at 7% p.a. for the following 4 years of the project. The selling price will be around $130 per unit and the production costs will be $16 per unit. Marketing costs are expected to be 20% of annual sales and are paid at the start of each year based on the sales estimate for the year, thus in year 5 there won’t be any marketing cost. An inventory worth $52 000 will also be needed at the commencement of operations. The inventory cost will be recovered at the end of the project.<BR>\n" );
document.write( "Showing all relevant cash flows, calculate the project’s NPV. No incomplete units can be sold, so round the unit sales to the nearest whole number. Indicate if you should start this business or not<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #704166 by </B><A HREF=/tutors/aboutme.mpl?userid=solver91311><B>solver91311(24713)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=solver91311><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=solver91311><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=704166\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> <font face=\"Times New Roman\" size=\"+2\">\r<BR>\n" );
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document.write( "This is a finance and accounting problem, not a math problem.  Please ask for help with your finance and accounting homework on a more appropriate website.  Meanwhile, I'm going to go the grocery store and see if I can buy a pound of 10d nails and a hammer.\r<BR>\n" );
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document.write( "John<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=\"/cgi-bin/rendertex.cgi?\LARGE e^{i\pi}\ +\ 1\ =\ 0\"><BR>\n" );
document.write( "My calculator said it, I believe it, that settles it<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=\"/cgi-bin/rendertex.cgi?\Large \ \\r\"> </SPAN>\n" );
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