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The Lazy Mower: Is It Really Worth It?

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Using the second case study in the attachment I have a few questions:

Using the base case estimates calculate the cash, accounting, and financial breakeven of teh Lazy Mower Project. Interpret each one.

Let's say the company had spent $500,000 in developing the prototype of the Lazy Mower. How should Dan and Ron treat this item in their report? Explain.

Calculate the IRR of the project. Based on your calculations what would you recommend and why?

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Solution Summary

Calculation of Cash Break Even Point, Accounting Break Even Point and Financial Break Even Point of Lazy Mower Project.
Calculation of IRR.
The company had spent $500,000 in developing the prototype of the Lazy Mower. How should Dan and Ron treat this item in their report? Explain.

Solution provided by:
Sonia Agarwal, CA
Education
  • Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
  • Bachelor of Commerce, West Bengal University
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