Question
In: Finance
We are evaluating a project that costs $2,190,000, has a 8-year life, and has no salvage...
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We are evaluating a project that costs $2,190,000, has a 8-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 91,200 units per year. Price per unit is $38.97, variable cost per unit is $24.05, and fixed costs are $866,000 per year. The tax rate is 22 percent and we require a return of 11 percent on this project. |
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Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent. Calculate the best-case and worst-case NPV figures. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
We are evaluating a project that costs $604,000, has an 8-year life, and has no salvage...
We are evaluating a project that costs $604,000, has an 8-year
life, and has no salvage value. Assume that depreciation is
straight-line to zero over the life of the project. Sales are
projected at 55,000 units per year. Price per unit is $36, variable
cost per unit is $17, and fixed costs are $685,000 per year. The
tax rate is 21 percent and we require a return of 15 percent on
this project. Suppose the projections given for price, quantity,...
We are evaluating a project that costs RM604,000, has an 8-year life, and has no salvage...
We are evaluating a project that costs RM604,000, has an 8-year
life, and has no salvage
value. Assume that depreciation is straight-line to zero over the
life of the project. Sales are
projected at 55,000 units per year. Price per unit is RM36,
variable cost per unit is RM17, and
fixed costs are RM685,000 per year. The tax rate is 21 percent and
we require a return of 15
percent on this project.
(i) Calculate the base-case cash flow and...
We are evaluating a project that costs $2,190,000, has a 8-year life, and has no salvage...
We are evaluating a project that costs $2,190,000, has a 8-year
life, and has no salvage value. Assume that depreciation is
straight-line to zero over the life of the project. Sales are
projected at 91,200 units per year. Price per unit is $38.97,
variable cost per unit is $24.05, and fixed costs are $866,000 per
year. The tax rate is 22 percent, and we require a return of 11
percent on this project.
a. Calculate the base-case operating cash flow...
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We are evaluating a project that costs $1,920,000, has a 6 year
life, and no salvage value. Assume that depreciation is
staright-line to zero over the life of the project. Sales are
projected at 94,000 units per year. Price per unit is $38.43,
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year. The tax rate is 23 percent and we require a return of 12
percent on this project.
Suppose the projections given for the price,...
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We are evaluating a project that costs $972,000, has a 4 year
life, and no salvage value. Assume that depreciation is
staright-line to zero over the life of the project. Sales are
projected at 88,000 units per year. Price per unit is $35.15,
variable cost per unit is $21.40 and fixed costs are $768,000 per
year. The tax rate is 35 percent and we require a return of 13
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A) Calculate the best case operating cash...
we are evaluating a project that costs $690,000, has a five year life, and no salvage...
we are evaluating a project that costs $690,000, has a five year
life, and no salvage value. Assume that straightline to zero over
the life of the project. sales are projected at 71,000 units per
year. price per unit is $75, variable cost per unit is $38 and
fixed costs are $790,000 per year. The tax rate is 35%, and we
require a return of 15% on this project Calculate the best case and
wore case npv figures
We are evaluating a project that costs $739,600, has aneight-year life, and has no salvage...
We are evaluating a project that costs $739,600, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 80,000 units per year. Price per unit is $49, variable cost per unit is $34, and fixed costs are $735,000 per year. The tax rate is 23 percent, and we require a return of 9 percent on this project. Suppose the projections given for price, quantity,...
We are evaluating a project that costs $748,000, has a twelve-year life, and has no salvage...
We are evaluating a project that costs $748,000, has a
twelve-year life, and has no salvage value. Assume that
depreciation is straight-line to zero over the life of the project.
Sales are projected at 113,000 units per year. Price per unit is
$36, variable cost per unit is $23, and fixed costs are $760,716
per year. The tax rate is 37 percent, and we require a 12 percent
return on this project.
Requirement 1:
Calculate the accounting break-even point.(Round your...
We are evaluating a project that costs $500,000, has an eight-year life, and has no salvage...
We are evaluating a project that costs $500,000, has an
eight-year life, and has no salvage value. Assume that depreciation
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projected at 50,000 units per year. Price per unit is $40, variable
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is straight-line to zero over the life of the project. Sales are
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cost per unit is $27, and fixed costs are $756,000 per year. The
tax rate is 25 percent, and we require a return of 15 percent on
this project.
a.
Calculate the accounting break-even point. (Do...
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