Question
In: Finance
A company is considering producing long telephoto zoom lens, iLongLens, attachment for the iPhone 5. The...
A company is considering producing long telephoto zoom lens, iLongLens, attachment for the iPhone 5. The initial investment for this project will be $3 million. This amount is for depreciable equipment, which will be depreciated over 5 years using the straight-line method to zero book value. The iLongLens is expected to generate Earnings before Depreciation and Taxes of $1.5 million per year for 6 years. At the end of the sixth year the equipment will be scrapped for $300,000. The company’s tax rate is 40% and the appropriate discount rate for this project is 15%.
-
List all 7 after-tax cash flows for this project (0 is the initial investment).
-
Compute the NPV.
-
Compute the IRR and payback.
Solutions
jeff jeffy answered 4 days agoRelated Solutions
A company is considering producing long telephoto zoom lens, iLongLens, attachment for the iPhone 5. The...
A company is considering producing long telephoto zoom lens,
iLongLens, attachment for the iPhone 5. The initial investment for
this project will be $3 million. This amount is for depreciable
equipment, which will be depreciated over 5 years using the
straight-line method to zero book value. The iLongLens is expected
to generate Earnings before Depreciation and Taxes of $1.5 million
per year for 6 years. At the end of the sixth year the equipment
will be scrapped for $300,000. The...
You are the manager of a company that sells iPhone cases. The costs of producing the...
You are the manager of a company that sells iPhone cases. The
costs of producing the cases are given by C = 200 + 20Q (or the
fixed costs are $200 and the variable costs are $20 per case). The
demand for the cases is given by QD = 180 – 5P.
a) What is the firm’s optimal quantity and price?
b) What is the firm’s profit at the optimal quantity and
price?
c) If the fixed costs decrease from...
A common zoom lens for a digital camera covers a focal length range of 18 mm...
A common zoom lens for a digital camera covers a focal length
range of 18 mm to 200 mm. For the purposes of this problem, treat
the lens as a thin lens. If the lens is zoomed out to 200 mm and is
focused on a petroglyph that is 15.0 m away and 38 cm wide, (a) how
far is the lens from the photosensor array of the camera and (b)
how wide is the image of the petroglyph on...
Bismarck Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS...
Bismarck Cameras, Inc. manufactures two models of cameras. Model
ZM has a zoom lens; Model DS has a fixed lens. Bismarck uses an
activity-based costing system. The following are the relevant cost
data for the previous month:
Direct Cost per Unit
Model ZM
Model DS
Direct materials
$
45
$
20
Direct labor
32
15
Category
Estimated Cost
Cost Driver
Use of Cost Driver
Unit level
$
27,000
Number of units
ZM: 2,400 units; DS: 9,600 units
Batch level...
Perez Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS...
Perez Cameras, Inc. manufactures two models of cameras. Model ZM
has a zoom lens; Model DS has a fixed lens. Perez uses an
activity-based costing system. The following are the relevant cost
data for the previous month:
Direct Cost per Unit
Model ZM
Model DS
Direct materials
$
20.0
$
9.0
Direct labor
28.0
11.0
Category
Estimated Cost
Cost
Driver
Use of Cost
Driver
Unit level
$
24,990
Number of units
ZM: 2,400 units; DS: 9,500
units
Batch...
Baird Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS...
Baird Cameras, Inc. manufactures two models of cameras. Model ZM
has a zoom lens; Model DS has a fixed lens. Baird uses an
activity-based costing system. The following are the relevant cost
data for the previous month:
Direct Cost per Unit
Model ZM
Model DS
Direct materials
$
20.00
$
7.00
Direct labor
28.00
9.00
Category
Estimated Cost
Cost Driver
Use of Cost Driver
Unit level
$
25,960
Number of units
ZM: 2,400 units; DS: 9,400 units
Batch level
52,000...
Finch Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS...
Finch Cameras, Inc. manufactures two models of cameras. Model ZM
has a zoom lens; Model DS has a fixed lens. Finch uses an
activity-based costing system. The following are the relevant cost
data for the previous month:
Direct Cost per
Unit
Model ZM
Model DS
Direct materials
$
20.4
$
7.0
Direct labor
28.8
9.0
Category
Estimated Cost
Cost
Driver
Use of
Cost Driver
Unit level
$
25,960
Number of units
ZM: 2,450 units; DS: 9,350
units
Batch...
Perez Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS...
Perez Cameras, Inc. manufactures two models of cameras. Model ZM
has a zoom lens; Model DS has a fixed lens. Perez uses an
activity-based costing system. The following are the relevant cost
data for the previous month:
Direct Cost per Unit
Model ZM
Model DS
Direct materials
$
20.9
$
7.0
Direct labor
29.8
9.0
Category
Estimated Cost
Cost Driver
Use of Cost Driver
Unit level
$
25,960
Number of units
ZM: 2,350 units; DS: 9,450 units
Batch...
Stuart Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS...
Stuart Cameras, Inc. manufactures two models of cameras. Model
ZM has a zoom lens; Model DS has a fixed lens. Stuart uses an
activity-based costing system. The following are the relevant cost
data for the previous month:
Direct Cost per Unit
Model ZM
Model DS
Direct materials
$
20.4
$
9.0
Direct labor
28.8
11.0
Category
Estimated Cost
Cost Driver
Use of Cost Driver
Unit level
$
24,990
Number of units
ZM: 2,450 units; DS: 9,450 units
Batch...
Given the long period of immaturity that the young of the human species have, is attachment...
Given the long period of immaturity that the young of the human
species have, is attachment necessarily universal? Would it be
possible for a child to grow to maturity without forming
attachments of some kind?
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