Consider a project to supply Detroit with 26,000 tons of machine screws annually for automobile production. You will need an initial $5,500,000 investment in threading equipment to get the project started; the project will last for 6 years. The accounting department estimates that annual fixed costs will be $1,325,000 and that variable costs should be $250 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life. It also estimates a salvage value of $700,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $362 per ton. The engineering department estimates you will need an initial net working capital investment of $530,000. You require a return of 11 percent and face a tax rate of 22 percent on this project. |
Calculate the accounting, cash, and financial break-even quantities. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) |
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Consider a project to supply Detroit with 26,000 tons of machine screws annually for automobile production....
Consider a project to supply Detroit with 26,000 tons of machine screws annually for automobile production. You will need an initial $5,900,000 investment in threading equipment to get the project started; the project will last for 6 years. The accounting department estimates that annual fixed costs will be $1,425,000 and that variable costs should be $270 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life. It also estimates a salvage value...
Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production. You will need an initial $5,700,000 investment in threading equipment to get the project started; the project will last for 6 years. The accounting department estimates that annual fixed costs will be $1,375,000 and that variable costs should be $260 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life. It also estimates a salvage value...
Consider a project to supply Detroit with 31,000 tons of machine screws annually for automobile production. You will need an initial $6,300,000 investment in threading equipment to get the project started; the project will last for 5 years. The accounting department estimates that annual fixed costs will be $1,525,000 and that variable costs should be $290 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 5-year project life. It also estimates a salvage value...
Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production. You will need an initial $5,300,000 investment in threading equipment to get the project started the project will last for 6 years. The accounting department estimates that annual fixed costs will be $1.275,000 and that variable costs should be $240 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life. It also estimates a salvage value...
Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production. You will need an initial $5,700,000 investment in threading equipment to get the project started; the project will last for 6 years. The accounting department estimates that annual fixed costs will be $1,375,000 and that variable costs should be $260 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life. It also estimates a salvage value...
Consider a project to supply Detroit with 40,000 tons of machine screws annually for automobile production. You will need an initial $4,800,000 investment in threading equipment to get the project started; the project will last for three years. The accounting department estimates that annual fixed costs will be $850,000 and that variable costs should be $250 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the three-year project life. It also estimates a salvage value...
Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production. You will need an initial $5,700,000 investment in threading equipment to get the project started; the project will last for 6 years. The accounting department estimates that annual fixed costs will be $1,375,000 and that variable costs should be $260 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life. It also estimates a salvage value...
Consider a project to supply Detroit with 25,000 tons of machine screws annually for automobile production. You will need an initial $2,200,000 investment in threading equipment to get the project started; the project will last for five years. The accounting department estimates that annual fixed costs will be $700,000 and that variable costs should be $400 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the five-year project life. It also estimates a salvage value...
Consider a project to supply Detroit with 40,000 tons of machine screws annually for automobile production. - Initial investment of $5,600,000 in threading equipment - the project will last for 6 years. -The accounting department estimates that annual fixed costs will be $600,000 -variable costs should be $250 per ton. - depreciate initial investment straight-line to 0 over 6 years with salvage value of $450,000 -contract at selling price of $340 per ton - the engineering department estimates you will...
Consider a project to supply Detroit with 28,000 tons of machine screws annually for automobile production. You will need an initial $5,200,000 investment in threading equipment to get the project started; the project will last for 5 years. The accounting department estimates that annual fixed costs will be $1,250,000 and that variable costs should be $235 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 5-year project life. It also estimates a salvage value...