Question
In: Finance
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information:
Sales price per abalone = $34.90
Variable costs per abalone = $6.00
Fixed costs per year = $374,000
Depreciation per year = $119,000
Tax rate = 34%
The discount rate for the company is 13 percent, the initial investment in equipment is $714,000, and the project’s economic life is six years. Assume the equipment is depreciated on a straight-line basis over the project’s life.
What is the financial break-even level for the project?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information:
Sales price per abalone
=
$35.20
Variable costs per abalone
=
$6.30
Fixed costs per year
=
$377,000
Depreciation per year
=
$122,000
Tax rate
=
34%
The discount rate for the company is 13 percent, the initial
investment in equipment is $732,000, and the project’s economic
life is six years. Assume the equipment is depreciated on a
straight-line basis over...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information:
Sales price per abalone
=
$44.70
Variable costs per abalone
=
$11.30
Fixed costs per year
=
$502,000
Depreciation per year
=
$103,000
Tax rate
=
22%
The discount rate for the company is 14 percent, the initial
investment in equipment is $927,000, and the project’s economic
life is 9 years. Assume the equipment is depreciated on a
straight-line basis over...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information:
Sales price per abalone
=
$43.10
Variable costs per abalone
=
$10.50
Fixed costs per year
=
$438,000
Depreciation per year
=
$131,000
Tax rate
=
21%
The discount rate for the company is 13 percent, the initial
investment in equipment is $917,000, and the project’s economic
life is 7 years. Assume the equipment is depreciated on a
straight-line basis over...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information:
Sales price per abalone
=
$43.60
Variable costs per abalone
=
$10.75
Fixed costs per year
=
$458,000
Depreciation per year
=
$136,000
Tax rate
=
21%
The discount rate for the company is 13 percent, the initial
investment in equipment is $952,000, and the project’s economic
life is 7 years. Assume the equipment is depreciated on a
straight-line basis over...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information: Sales price per abalone = $34.80 Variable costs per
abalone = $5.90 Fixed costs per year = $373,000 Depreciation per
year = $118,000 Tax rate = 35% The discount rate for the company is
15 percent, the initial investment in equipment is $826,000, and
the project’s economic life is seven years. Assume the equipment is
depreciated on a straight-line basis over...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information: Sales price per abalone = $44.10 Variable costs per
abalone = $11.00 Fixed costs per year = $478,000 Depreciation per
year = $117,000 Tax rate = 21% The discount rate for the company is
13 percent, the initial investment in equipment is $936,000, and
the project’s economic life is 8 years. Assume the equipment is
depreciated on a straight-line basis over...
You are considering investing in a company that cultivates abalone for sale to local restaurants. Use...
You are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information:
Sales price per abalone
=
$44.80
Variable costs per abalone
=
$11.35
Fixed costs per year
=
$506,000
Depreciation per year
=
$104,000
Tax rate
=
23%
The discount rate for the company is 15 percent, the initial
investment in equipment is $936,000, and the project’s economic
life is 9 years. Assume the equipment is depreciated on a
straight-line basis over...
You are considering investing in a conpany that cultivates abalone for sale to local restaurants. use...
You
are considering investing in a conpany that cultivates abalone for
sale to local restaurants. use the following information:
sale price per abalone= $43.70
variable cost per abalone= $10.80
fixed cost per year = $462,000
depreciation per year= $137,000
tax rate= 22%
The discount rate for the conpany id 14 percent, the initial
investment in equipment is $959,000, and the project's economic
life is 7 years. Assume the equipment is depreciated on a
straight-line basis over the projects life and...
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You are considering investing in a start up company. The founder asked you for $ 260...
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investment? opportunity? Should you undertake the investment?
opportunity? Calculate the IRR and use it to determine the maximum
deviation allowable in the cost of capital estimate to leave the
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