Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with...
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $22,000, and annual costs of $19,000. Annual revenue was $26,000 and the used equipment was salvaged for $6,000. What rate of return did the company make on this product?
Homework Answers
- Net cash flow, years 1-4 = Annual revenue - Annual cost = $26,000 - $19,000 = $7,000
- In year 0, Net cash flow = - $22,000
- In year 5, Net cash flow = $7,000 + $6,000 salvage value = $13,000
Rate of Return (ROR) is computed using Excel IRR function as follows.
| Year | Revenue ($) | Cost ($) | Net Cash Flow ($) |
| 0 | 22,000 | -22,000 | |
| 1 | 26,000 | 19,000 | 7,000 |
| 2 | 26,000 | 19,000 | 7,000 |
| 3 | 26,000 | 19,000 | 7,000 |
| 4 | 26,000 | 19,000 | 7,000 |
| 5 | 32,000 | 19,000 | 13,000 |
| ROR = | 22.52% |
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Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with...
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated...
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $20,000, and annual costs of $18,000 Annual revenue was $26,000 and the used equipment was salvaged for $4,000. What rate of return did the company make on this product? The rate of return that the company made on the product is %.
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs...
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $21,000, and annual costs of $19,000. Annual revenue was $30,000 and the used equipment was salvaged for $5,000. What rate of return did the company make on this product? The rate of return that the company made on the product is 30
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i tried 5% and 25% it is wrong?
should i use interpolation? if so, how?
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $22,000, and annual costs of $18,000. Annual revenue was $27.000 and the used equipment was salvaged for $5,000. What rate of return did the company make on this product? The rate of return that the company made on...
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