Question

ANSWER THE FOLLOWING QUESTIONS:-

7-OUsanh A company has tracked the average production cost on a car manufacturing line for 10 years Cost averages were steady at $100 per completed unit for the first 5 years, but have increased consistently by $50 per unit for each of the last 5 years. The Company Invested $4,000,000/- to set up the plant, it is producing 1000 units annually which it sells at $250 per unit for first 5 years and increases the selling price by $75 per unit each year after that. Current salvage value of the plant is $2,000,000/- Draw Cash Flow Diagram locating all data. Take i 10% per year

Answer 1

Sunil Dase Pag cash inflews Cincanes) will foint up ards aut flows leaense flaw diagva Aus:-2) All the and t all the Cash point dlownwards invested will It is aiven that to set up the plan company he dvawn Wehave. diageeu Disg e) fir the beginning at cash draw ab CFD CCas, Fln he to therotore 10 years Copary pvoduces 1 900 Uniks annually fov Firs t single Cost aveyages For 5 years 1o0 140X1900 io00 Uhits 1 0 060o Cos t averagqes for Cost by $50-eve vy year 4tter Ihcve ases avevageg Syears Cost 150000 1000 units tor 6 yeav avevage for fev 1000 Units fov 7 avevage y ear Units tor unit s dov year 000 last ave vag e for yeav: S 2 50000 1000 for Cost Cve rage fov touo ynits fov Cest ave y age 3 So000 single unit t sells dirst 5 years at the Yate 250 Cespuay for fixst Syears 1600 Units Sells 250X1000 250000 (ampay unit for 6yeav Single sclls 2S0 t7 32 5

Sunil Confeny sells Company sels single onit fo,ycur325+7-Sy00 Caspery tor yeer もう 1600 units 325DO0 Sclls 1o 00 Units 400000 yeur S darly Sells looo unts for vear 475000 Canpony Sells 68 its for 9 yeay 2 S550oD0 10 00 Uits fov loyear Sells 625 000 Current Salvage Yolue of the plant S2, 600,O00 Cash Flow Diagran £475000 4.5S00D $2,000,000) 400060 a2500 S250000(each 3 Jo0000 leach) 25000 $300000 $3S6000