Strasburg’s plans require a capital investment of $200 million if units per year at a sales...

Strasburg’s plans require a capital investment of $200 million if units per year at a sales price of $2 per unit. The Fixed costs per unit is $20 with variable cost $1.5 per unit what would be company’s operating break even quantity.

Expert Solution

Sales Price =2
Variable Cost =1.5
Operating Break even Quantity =Fixed Cost /(Sales Price-Variable Cost) =20/(2-1.5) =40

jeff jeffy answered 2 years ago

ABC Company wants to produce 1.35 million units per year of a product. Investment cost is...

ABC Company wants to produce 1.35 million units per year of a product. Investment cost is 27.5 million dollars and the project falls under the 7 year MACRS class life with a salvage value of of 2.75 million at the end of 6 years. The average price for each unit is $90. Annual expected sales are shown below. Year. 2020. 2021. 2022. 2023. 2024. 2025 Volume. 600. . 750 1000. 1200. 1200. 1200 Material cost for each unit is $25...

You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $9.5 million. Investment A will generate $2.14 million per year (starting at the end of the first year) in perpetuity. Investment B will

You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $9.5 million. Investment A will generate $2.14 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.57 million at the end of the first year, and its revenues will grow at 2.7% per year for every year after that.a. Which investment has the higher IRR? b. Which investment has the higher NPV when the cost of capital is 7.1%? c....

Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate that...

Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate that it will enable them to earn an additional $600,000 after tax. What would be the impact on earnings per share if the raise the $1,000,000 by: a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be coverted into 10 shares of Peyton common stock? b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted...

RECEIVABLES INVESTMENT Leyton Lumber Company has sales of $12 million per year, all on credit terms...

RECEIVABLES INVESTMENT Leyton Lumber Company has sales of $12 million per year, all on credit terms calling for payment within 30 days, and its accounts receivable are $2.4 million. Assume 365 days in year for your calculations. What is Leyton's DSO? Round your answer to two decimal places. days What would DSO be if all customers paid on time? Round your answer to two decimal places. days How much capital would be released if Leyton could take actions that led...

Sales 3 million dollars per year Cost of goods 1.7 million dollars per year Cash Expenses...

Sales 3 million dollars per year Cost of goods 1.7 million dollars per year Cash Expenses 725 thousand dollars per year Depreciation Expense 125 thousand dollars per year Cash on the balance sheet 150 thousand dollars Receivables on the balance sheet 75 thousand dollars Inventory on the balance sheet 300 thousand dollars Fixed asset net of depreciation on the balance sheet 450 thousand dollars Total Current Liabilities on the balance sheet 175 thousand dollars Total Long Term Debt on the...

A proposed new investment has projected sales of 15,000 units in year 1 and 20,000 units...

A proposed new investment has projected sales of 15,000 units in year 1 and 20,000 units in year 2. The sales price for both years will be $10 per unit. The project will terminate after the second year. Variable costs are expected to be 50% of sales. Fixed costs will be $25,000 per year. The investment will cost $20,000 and will be depreciated straight line to $0 over the 2 year period. The tax rate is 34% for both years...

Currently, the sales of a company is $12,800,000 per year: price per unit $12.8; units sold...

Currently, the sales of a company is $12,800,000 per year: price per unit $12.8; units sold 1,000,000 per year; direct cost per unit $9.60; A/R 25% of $ sales (ignore A/P); inventory 25% of direct cost; cash operating expense $890,000 per year; annual depreciation $600,000; tax rate 34%; capital expenditure is zero. Now you are estimating the free cash flow for the next year when the unit sales price changes to $15.36, thus changing $ sales; however, the number of...

An investment project will require development costs of $150 million at time zero and $80 million...

An investment project will require development costs of $150 million at time zero and $80 million at the end of second year from time zero with incomes of $25 million per year at the end of years 1, 2 and 3 and incomes of $60 million per year at the end of years 4 through 10 with zero salvage value predicted at the end of year 10. Calculate the rate of return for this project. Please explain your work in...

71. Last year Dania Corporation's sales were $525 million. If sales grow at 9.8% per year,...

71. Last year Dania Corporation's sales were $525 million. If sales grow at 9.8% per year, how large (in millions) will they be 8 years later? a. $1,142.39 b. $1,109.12 c. $1,364.22 d. $1,131.30 e. $842.93 72. How much would $1, growing at 13.7% per year, be worth after 75 years? a. $18,248.03 b. $15,206.70 c. $15,358.76 d. $13,533.96 e. ...

A company has a production at a rate of 200 units per day. 80 units will...

A company has a production at a rate of 200 units per day. 80 units will be sold daily. The production will take place five days a week, 48 weeks a year. It usually takes a full day to get the machine ready for another production run, at a cost of $300. Inventory holding costs will be $10 a year. (calculate to2 decimal places) a. What is the optional run size and lowest annual cost for carrying and setup? b....

Question