[adewuyiontrone]

J Plc is considering investing £1m in a new project to manufacture and sell a brand new toy. The following estimates have been made:

Sales (number of units) 50,000 in the first year, rising by 10,000 units per annum

Life of project 4 years

Unit information: £
Price 25
Material cost 10
Labour and variable overheads 8

In addition, fixed overheads relating to the project are expected to be £90,000 per annum. The investment is expected to have no residual value.

[morgaine300]

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