Bloomz originally established in 1962 to make toys is now a leading producer of curios and toys .In 1990 the company introduced 'high flite' its...

8000

The price of the ball in the first year will be Rs 99 each . The market is competitive so Jack believes that the price will increase at only 5% per year . Conversely the raw materials used to produce the colored balls are rapidly growing at 10% per year . Production cost in the first year will be Rs 50 . The management of Bloomz believes that the investment in the different items of working capital will be Rs 15, 000 and the company is in the 35% tax bracket .

Is this project worthwhile if the cost of funds for Bloomz is 15% ?