1.
=(Price-Variable Cost)*(1-tax rate)
=(392-275)*(1-22%)
=91.26000
2.
=(Price-Variable Cost)*(1-tax rate)/required
return*(1-1/(1+required return)^t)
=(392-275)*(1-22%)/11%*(1-1/1.11^6)
=386.07888
3.
-1450000+825000*(1-22%)/1.11^6-580000+580000/1.11^6+((Q*(392-275)-1450000-6000000/6)*(1-22%)+6000000/6)/11%*(1-1/1.11^6)=0
=>Q=13546.161500
Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production....
Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production. You will need an initial $4,600,000 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 $1,100,000 and that variable costs should be $205 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 $4,600,000 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 $1,100,000 and that variable costs should be $205 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...
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Consider a project to supply Detroit with 25,000 tons of machine screws annually for automobile production. You will need an initial $4,500,000 investment in threading equipment to get the project started: the project will last for 5 vears. The accounting department estimates that annual fixed costs will be $1,075,000 and that variable costs should be $200 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...
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