Question

Can I please receive assistance with the sections highlighted in Yellow. Please provide an explanation as to how to calculate these figures, I am not familiar with how to calculate the Break-even, and I want to learn. Thank you!

.Year 0 Year 1 Year 2 Year 3 Totals $0 Net Economic Benefit Discount Rate (5%) PV of Benefits NPV of Benefits $40,000 0.9524 $

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Yearly NPV cash flow = PV of benefits - PV of Costs

Overall = Cumulative NPV

Hence, Yearly NPV Cash flows are as follows

Year 0 =-30,000

Year 1 = 38096-14286 =$23810

Year 2 = 40815 - 13605 =$27210

Year 3 = 38871 - 12957 =$25,914

Overall is as follows

Year0 =-30,000

Year 1 = -30000+23810

=-$6190

Year 2 = -6190+27210

=$21020

Year 3 = 21020+25914 =$46934

Break even occurs when overall NPV cash flow reaches 0

I.e. between years 1 and 2

Add a comment
Know the answer?
Add Answer to:
Can I please receive assistance with the sections highlighted in Yellow. Please provide an explanation as...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Based on the initial four-year economic feasibility study below -- a. If the project is allowed...

    Based on the initial four-year economic feasibility study below -- a. If the project is allowed to proceed even with a negative ROI, what are the possible reasons for reaching such a decision? b. Up to how much could the development cost be for the project to at least break even? c. Similar to part b, up to how much could the operator hiring and training cost be for the project to at least break even? d. If the cash...

  • A project where the projected costs and benefits are spread over five years with the following...

    A project where the projected costs and benefits are spread over five years with the following data: • Estimated costs are $100,000 in Year 1 and $25,000 each for years 2, 3, 4, and 5. • Estimated benefits are $0 in Year 1 and $80,000 each for years 2, 3, 4, and 5. • Use a discount rate of 8% 1.Calculate the following: a. Calculate cash flow b. Show the discount factor c. Show discounted costs and discounted benefits d....

  • please answer the full question nework i We are evaluating a project that costs $650,000, has...

    please answer the full question nework i We are evaluating a project that costs $650,000, has a five-year life, and has no salvage value. Assume that depreciation is straight- line to zero over the life of the project. Sales are projected at 47,000 units per year. Price per unit is $56, variable cost per unit is $26. and fixed costs are $845,000 per year. The tax rate is 35 percent, and we require a return of 10 percent on this...

  • Can someone please explain where did the 270,000 net income and 45000 units at price 58...

    Can someone please explain where did the 270,000 net income and 45000 units at price 58 came from. I read the explanation but didnt find it helpful at all. Thank you. Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company's present selling price is $70 per unit, and...

  • The highlighted sections are the ones i need figured out MGMT 640 GROUP PROJECT to your...

    The highlighted sections are the ones i need figured out MGMT 640 GROUP PROJECT to your team has been hired to provide financial analysis for a start-up company, Bobble in Style, n produces customized bobble heads. The bobble heads are made out of less rigid materials and are more true to life more true to life than those of competitors. The company inventors, Mr. and Mrs. Lee, are going to pitch trieir idea to Shark Tank in a few months,...

  • Hello, I am requesting assistance for the following question. Can you please provide an explanation for...

    Hello, I am requesting assistance for the following question. Can you please provide an explanation for the correct answer? Thank you. At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows: Accumulated Depreciation and Amortization Category Land Buildings Equipment Automobiles and trucks Leasehold improvements Land improvements Plant Asset $ 168,000 1,150,000 775,000 165,000 202,000 321,900 310,500 93,325 101,000 Depreciation methods and useful lives: Buildings—150% declining balance, 25 years. Equipment—Straight line; 10 years....

  • Hi there, I have problem-solving this question, would definitely need help to explain if we need ...

    Hi there, I have problem-solving this question, would definitely need help to explain if we need to look for the taxable income portion: Question: Topless:- A sporty convertible with a cost of $100,000 and a useful life of 5 years. It will produce rental income of $60,000 per year and operating costs of $10,000 per year. A major service is required after 3 years costing $15,000. A salvage value of $25,000 is expected after 5 Years. The required return is...

  • Because of its inability to control film and personnel costs in its radiology department, Sanger General...

    Because of its inability to control film and personnel costs in its radiology department, Sanger General Hospital wants to replace its existing picture archive and communication (PAC) system with a newer version. The existing system, which has a current book value of $2,250,000, was purchased three years ago for $3,600,000 and is being depreciated on a straight-line basis over an eight-year life to a salvage value of $0. This system could be sold for $800,000 today. The new PAC system...

  • can someone please help me! I am so lost AutoSave $ u- Capital Budgeting Assignment FNCE...

    can someone please help me! I am so lost AutoSave $ u- Capital Budgeting Assignment FNCE 301 119 template-Saved to my Mac Home Insert Draw Page Layout Formulas Data Review View Developer Share Comments 2! Insert Times New Roman 10 A A = = = D 2Wraa Text General E AY-O. 4 Delete 2 Conditional Format Call Sort & Sensitivity Pesce Find & a Ideas B B IU E E B Merge & Center A $ - % Formatting as...

  • This is the question , honestly , you could skip the garbage at first and jump...

    This is the question , honestly , you could skip the garbage at first and jump to the Question section. below is my excel sheet , I need to do the 4 requirements under the Question section. to make your life easier you could copy the numbers from my sheet but i dont know how the function work exactly , as the professor is the one who sets it up. IEN 363 Spring 2019 Fnancial Analys1S Assignment ost benefit analysis...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT