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In: Finance
Herrera Music is considering the sale of a new sound board used in recording studios. The new...
Herrera Music is considering the sale of a new sound board used in recording studios. The new board would sell for $25,500 and the company expects to sell 1,400 per year. The company currently sells 1,900 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,720 units per year. The old board retails for $21,400. Variable costs are 55 percent of sales, depreciation on the equipment to produce the new board will be $1,350,000 per year and fixed costs are $1,250,000 per year. If the tax rate is 38 percent, what is the annual OCF for the project? Please post pictures on how you do this in excel step by step thank you !
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Cusic Music Company is considering the sale of a new sound board used in recording studios....
Cusic Music Company is considering the sale of a new sound board
used in recording studios. The new board would sell for $24,300,
and the company expects to sell 1,600 per year. The company
currently sells 1,950 units of its existing model per year. If the
new model is introduced, sales of the existing model will fall to
1,620 units per year. The old board retails for $22,700. Variable
costs are 55 percent of sales, depreciation on the equipment to...
Cusic Music Company is considering the sale of a new sound board used in recording studios....
Cusic Music Company is considering the sale of a new sound board
used in recording studios. The new board would sell for $23,700,
and the company expects to sell 1,540 per year. The company
currently sells 1,890 units of its existing model per year. If the
new model is introduced, sales of the existing model will fall to
1,560 units per year. The old board retails for $22,100. Variable
costs are 55 percent of sales, depreciation on the equipment to...
Debby’s Dance Studios is considering the purchase of new sound equipment that will enhance the popularity...
Debby’s Dance Studios is considering the purchase of new sound
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the new equipment will attract, but she estimates that her
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Commercial Recording, Inc. is a manufacturer and distributor of mixing consoles for commercial recording studios. Revenue...
Commercial Recording, Inc. is a manufacturer and distributor of
mixing consoles for commercial recording studios. Revenue and cost
relations are:
TR = $3,000Q - $0.5Q2
MR
TC = $100,000 + $1,500Q + $0.1Q2
MC
Calculate output, marginal cost, average cost, price, and
profit at the average cost- minimizing activity level.
Calculate these values at the profit-maximizing activity
level.
Compare and discuss your answers to parts A and B.
= TR/ Q=$3,000-$1Q
= TC/ Q = $1,500 + $0.2Q
2
Discuss the importance of music and sound?
Discuss the importance of music and sound?
Cowboy Recording Studio is considering the investment of $143,400 in a new recording equipment. It is...
Cowboy Recording Studio is considering the investment of
$143,400 in a new recording equipment. It is estimated that the new
equipment will generate additional cash flow of $21,000 per year
for each year of its 7-year life and will have a salvage value of
$13,500 at the end of its life. Cowboys’s financial managers
estimate that the firm’s cost of capital is 8%. Use Table 6-4 and
Table 6-5. (Use appropriate factor(s) from the tables provided.
Round the PV factors...
Cowboy Recording Studio is considering the investment of $130,500 in a new recording equipment. It is...
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Table 6-5.(Use appropriate factor(s) from the tables
provided. Round the PV factors to...
Cowboy Recording Studio is considering the investment of $138,600 in a new recording equipment. It is...
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$138,600 in a new recording equipment. It is estimated that the new
equipment will generate additional cash flow of $20,500 per year
for each year of its 8-year life and will have a salvage value of
$13,500 at the end of its life. Cowboys’s financial managers
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Table 6-5.(Use appropriate factor(s) from the tables
provided. Round the PV factors to...
Beyond -Say Corp. is considering purchasing $55,000 of music recording equipment. The equipment has a market...
Beyond -Say Corp. is considering purchasing $55,000 of music
recording equipment. The equipment has a market resale value of
$3,000 and is expected to be used over the next four years. Net
income after taxes is estimated to be $4,200. The company's
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AP. Beyond-Say Corp. is considering purchasing $55,000 of music recording equipment. The equipment has a market...
AP. Beyond-Say Corp. is considering purchasing $55,000 of music
recording equipment. The equipment has a market resale value of
$3,000 and is expected to be used over the next four years. Net
income after taxes is estimated to be $4,200. The company’s
required rate of return is 10% and the company uses the
straight-line method. The tax rate is 40%.
How much is the project’s NPV?
What is the project’s payback period?
How much are the annual recurring cash flows...
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