Assume an average selling price of $547 per unit, a variable cost per unit of $339,...
Assume an average selling price of $547 per unit, a variable cost per unit of $339, a monthly interest rate of 1.1 percent, and a default rate of 3.1 percent. What is the NPV of extending credit for 30 days to all who are expected to become repeat customers?
$13,609
$17,984
$18,662
$19,787
$12,304
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Assume an average selling price of $547 per unit, a variable
cost per unit of $339,...
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Sosin Inc. manufactures hydrogen engines. Recently 350 new orders placed by customers requesting credit. The variable cost is $16,000 per unit, and the credit price is $18,400 each. Credit is extended for one period, and based on historical experience, payments for 15% of the orders are never collected. The required return is 3% per period. Suppose that customers who don’t default become repeat customers and they never default. Calculate the NPV?
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Number of units manufactured and sold Selling price per unit Variable manufacturing and selling costs per...
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The selling price of a unit is $21.2 and the variable product cost per unit is...
The selling price of a unit is $21.2 and the variable product cost per unit is $15.1. In addition, a sales commission of 5% is paid on each sale. If the variable product cost per unit increases by 1%, what will be the new contribution margin per unit? $4.90 $5.20 $4.89 $6.10
Problem #1 Your company is considering changing terms to offer a discount. The average price of the products...
Problem #1 Your company is considering changing terms to offer a discount. The average price of the products you sell is $10.00. You will allow customers who pay with 15 day to continue to pay $10. But those who do not take the discount and take an additional 10 days to pay will pay $10.25 for each product. The average default rate is 3%. The discount rate you will use for this problem is 0.75%. The units sold are expected...
Solar Engines manufactures solar engines for tractor-trailers. Given the fuel savings available, new orders for 175 units have been made by customers requesting credit. The variable cost is $11,200 per unit, and the credit price is $13,750 each. Credit is extended for one period. The required return is 1.7 percent per period and the probability of default is 15 percent. Assume the number of repeat customers is affected by the defaults. In other words, 35 percent of the customers who...
Number of units manufactured and sold Selling price per unit Variable manufacturing and selling costs per unit Hours spent by engineers improving design. Testing and inspection hours per unit Percentage of units reworked in the plant after inspection Average variable rework costs per refrigerator 3,200 units 1,250 750 1,500 0.5 hours 7% 520 Percentage of units reworked in the plant after inspection Average variable rework costs per refrigerator. Percentage of units repaired under warranty at customers' homes Average variable repair...
For a table manufacturing company, selling price for a table is $156.00 per Unit, Variable cost is $25.00 per Unit, rent is $3,179.00 per month and insurance is $292.00 per month. Company wants to expand its business and improve the table quality, it wants to increase the selling price for a table to $297.00 per Unit, Variable cost to $42.00 per Unit, bigger area will have rent $5,816.00 per month and insurance is $336.00 per month At what point will...
Problem #1 Your company is considering changing terms to offer a discount. The average price of the products you sell is $10.00. You will allow customers who pay with 15 day to continue to pay $10. But those who do not take the discount and take an additional 10 days to pay will pay $10.25 for each product. The average default rate is 3%. The discount rate you will use for this problem is 0.75%. The units sold are expected...
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