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ment has an initial cash outflow of $210,000 for fixed assets that will be depreciated straight...
Cedar Company has the following information related to a new project: Initial investment: $1,498,000; Fixed costs:...
Cedar Company has the following information related to a new project: Initial investment: $1,498,000; Fixed costs: $416,000; Variable costs: $12.30 per unit; Selling price: $31.20 per unit; Discount rate: 13 percent; Project life: 5 years; Tax rate: 25 percent. Fixed assets are depreciated using straight-line depreciation over the project's life. What is the financial break-even point? 46,773 units 44,275 units 48,924 units 50,008 units 42,683 units
Nike can produce jerseys that will be sold for $76 each. Non-depreciated fixed costs are $1,040...
Nike can produce jerseys that will be sold for $76 each. Non-depreciated fixed costs are $1,040 per year and variable costs are $57 per unit. a. If the project requires an initial investment of $2,810 and is expected to last for 6 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 6 years to a final value of zero, and the discount rate is...
A project requires an initial fixed asset investment of $600,000, which will be depreciated straight-line to...
A project requires an initial fixed asset investment of $600,000, which will be depreciated straight-line to zero over the six-year life of the project. The pre-tax salvage value of the fixed assets at the end of the project is estimated to be $50,001. Projected sales volume for each year of the project is shown below. The sale price is $50 per unit for the first three years, and $45 per unit for years 4 through 1. A $30,000 initial investment...
You have compiled the following information for a proposed expansion project. Initial investment: $349,000 Fixed costs:...
You have compiled the following information for a proposed expansion project. Initial investment: $349,000 Fixed costs: $57,700 Variable costs: $112.64 per unit Selling price: $224.90 per unit Discount rate: 11% Project life: 3 years Tax rate: 21% Depreciation is straight-line to zero over the project's life. What is the financial break-even point? 1,986 1,849 2,319 4,173 1,550
Use straight line depreciation instead of $140 3. (20 points) The Ons Company has the following...
Use straight line depreciation instead of $140
3. (20 points) The Ons Company has the following cost information on its new project: Initial investment: $700 Fixed costs are $200 per year Variable costs: $3 per unit Depreciation: $140 per year Price: $8 per unit Discount rate: 12% Project life: 3 years Tax rate: 34% a) Calculate the accounting and financial break-even quantities. b) Draw on a graph how the accounting and financial break-even quantity would change as the price changes?...
that requires an initial fixed asset investment of $2.9 million. The fixed asset will be depreciated...
that requires an initial fixed asset investment of $2.9 million. The fixed asset will be depreciated straight- line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,190,000 in annual sales, with costs of $815,000. If the tax rate is 35 per- cent, what is the OCF for this project? 9. Calculating Project OCF [L01] Quad Enterprises is considering a new three-year expansion project
accounting break-even production quantity for a project is 12,320 units. The fixed costs are $216,000 and...
accounting break-even production quantity for a project is 12,320 units. The fixed costs are $216,000 and the contribution margin per unit is $28. The fixed assets required for the project will be depreciated on straight-line basis to zero over the project's 5-year life. What is the amount of fixed assets required for this project? A. B. $325,920 $644,800 S748.500 C. D. E. S1,080,000 $1,629,600
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information: Sales price per = $43.70 abalone Variable costs per - $10.80 abalone Fixed costs per year Depreciation per year = $462,000 $137,000 Tax rate = 22% The discount rate for the company is 14 percent, the initial investment in equipment is $959,000, and the project's economic life is 7 years. Assume the equipment is depreciated on a straight-line basis over the...
Consider a four-year project with the following information: initial fixed asset investment = $57...
Consider a four-year project with the following information:
initial fixed asset investment = $570,000; straight-line
depreciation to zero over the four-year life; zero salvage value;
price = $40; variable costs = $27; fixed costs = $245,000; quantity
sold = 88,000 units; tax rate = 22 percent.
Consider a four-year project with the following information: initial fixed asset investment $570,000; straight-line depreciation to zero over the four-year life; zero salvage value price $40; variable costs-$27 fixed costs- $245,000; quantity sold -...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information: Sales price per abalone = $43.30 Variable costs per abalone = $10.60 Fixed costs per year = $446,000 Depreciation per year = $133,000 Tax rate = 23% The discount rate for the company is 15 percent, the initial investment in equipment is $931,000, and the project’s economic life is 7 years. Assume the equipment is depreciated on a straight-line basis over...
A project requires an initial fixed asset investment of $600,000, which will be depreciated straight-line to zero over the six-year life of the project. The pre-tax salvage value of the fixed assets at the end of the project is estimated to be $50,001. Projected sales volume for each year of the project is shown below. The sale price is $50 per unit for the first three years, and $45 per unit for years 4 through 1. A $30,000 initial investment...
You have compiled the following information for a proposed expansion project. Initial investment: $349,000 Fixed costs: $57,700 Variable costs: $112.64 per unit Selling price: $224.90 per unit Discount rate: 11% Project life: 3 years Tax rate: 21% Depreciation is straight-line to zero over the project's life. What is the financial break-even point? 1,986 1,849 2,319 4,173 1,550
Use straight line depreciation instead of $140
3. (20 points) The Ons Company has the following cost information on its new project: Initial investment: $700 Fixed costs are $200 per year Variable costs: $3 per unit Depreciation: $140 per year Price: $8 per unit Discount rate: 12% Project life: 3 years Tax rate: 34% a) Calculate the accounting and financial break-even quantities. b) Draw on a graph how the accounting and financial break-even quantity would change as the price changes?...
that requires an initial fixed asset investment of $2.9 million. The fixed asset will be depreciated straight- line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,190,000 in annual sales, with costs of $815,000. If the tax rate is 35 per- cent, what is the OCF for this project? 9. Calculating Project OCF [L01] Quad Enterprises is considering a new three-year expansion project
accounting break-even production quantity for a project is 12,320 units. The fixed costs are $216,000 and the contribution margin per unit is $28. The fixed assets required for the project will be depreciated on straight-line basis to zero over the project's 5-year life. What is the amount of fixed assets required for this project? A. B. $325,920 $644,800 S748.500 C. D. E. S1,080,000 $1,629,600
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information: Sales price per = $43.70 abalone Variable costs per - $10.80 abalone Fixed costs per year Depreciation per year = $462,000 $137,000 Tax rate = 22% The discount rate for the company is 14 percent, the initial investment in equipment is $959,000, and the project's economic life is 7 years. Assume the equipment is depreciated on a straight-line basis over the...
Consider a four-year project with the following information:
initial fixed asset investment = $570,000; straight-line
depreciation to zero over the four-year life; zero salvage value;
price = $40; variable costs = $27; fixed costs = $245,000; quantity
sold = 88,000 units; tax rate = 22 percent.
Consider a four-year project with the following information: initial fixed asset investment $570,000; straight-line depreciation to zero over the four-year life; zero salvage value price $40; variable costs-$27 fixed costs- $245,000; quantity sold -...
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