a company is investigating the feasibility of introducing a new product. The company has given you the following information:
What is the after-tax salvage value of the fixed asset at the end of the project?
a company is investigating the feasibility of introducing a new product. The company has given you...
PlumYum Inc, a dried fruit producer in Massachusetts is investigating the feasibility introducing a new product: dried strawberry! The company has given you, the financial adviser for the company, the following information: The estimated unit sales are 15000 packs in the first year, and 25000 packs in the second year. The project will end at the end of the second year. Each package will sell for $15 in the first year. When the competition catches up after two years, you...
Question 1: Evergreen company is investigating the feasibility of buying a new production line producing a new product. They project unit sales as in the below table, and they project price per unit to be $120 per unit at the beginning. And when competition catches up after 3 years (in the 4th year), they anticipate that the price would drop to $110. This project requires $20,000 in net working capital at the beginning. Subsequently, total net working capital at the...
1) A project has an initial requirement of $ 260,000 for fixed assets and $16,500 for net working capital. The fixed assets will be depreciated to a zero-book value over the four-year life of the project and have an estimated salvage value of $50,000. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $82,500 and the discount rate is 12 percent. What is the project's net present value...
The Solomon Company is evaluating the feasibility of introducing a new product. To enter this market Solomon must invest in equipment costing $1,00,000. Each product sold is expected to have a variable cost of $10 per unit. The president of Solomon has said he wants the product to return all investment in the first year. What is Solomon's break-even point in units for the first year if the product is sold to customers for $40 per unit?
Aday Acoustics, Inc., projects unit sales for a new 7-octave voice emulation implant as follows: Year Unit Sales 78,000 83,400 90,200 86,300 74,300 Production of the implants will require $1,600,000 in net working capital to start and additional net working capital investments each year equal to 15 percent of the projected sales increase for the following year. Total fixed costs are $4,400,000 per year, variable production costs are $155 per unit, and the units are priced at $337 each. The...
Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 74,600 87,600 107.000 99,400 68,100 Production of the implants will require $1,900,000 in net working capital to start and additional net working capital investments each year equal to 15 percent of the projected sales increase for the following year. Total fixed costs are $4,000,000 per year, variable production costs are $263 per unit, and the units are priced at $399 each....
Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 73,000 86,000 105,000 97,000 67,000 mo Production of the implants will require $1,500,000 in net working capital to start and additional networking capital investments each year equal to 15 percent of the projected sales increase for the following year. Total fixed costs are $3,200,000 per year, variable production costs are $255 per unit, and the units are priced at $375 each....
A company is considering a 5-year project to expand production with the purchase of a new automated machine using the latest technology. The new machine would cost $160,000 FOB St. Louis, with a shipping cost of $7,000 to the plant location. Installation expenses of $15,000 would also be required. This new machine would be classified as 7-year property for MACRS depreciation purposes. The project engineers anticipate that this equipment could be sold for salvage for $43,000 at the end of...
A company is considering a 5-year project to expand production with the purchase of a new automated machine using the latest technology. The new machine would cost $220,000 FOB St. Louis, with a shipping cost of $8,000 to the plant location. Installation expenses of $14,000 would also be required. This new machine would be classified as 7-year property for MACRS depreciation purposes. The project engineers anticipate that this equipment could be sold for salvage for $38,000 at the end of...
Frito Lay is considering a new line of potato chips. This will be a two year project. a. Frito Lay paid $1,000,000 last year to a winning person who thought of the new line of potato chips. b. New equipment for the factory line will cost $12,000,000 and depreciation is by the 5-year MACRS method. Purchase of the equipment will require an increase in net working capital of $600,000 at time 0 (which will be recaptured at the end of...