1. A plant has a capacity of 4,100 hydraulic pumps per month. The fixed cost is $504,000 per month. The variable cost is 4166 per pump, and the sales price is $328 per pump (assume that sales equal output volume). What is the breakeven point in number of pumps per month? What percentage reduction will occur in the breakeven point if fixed costs reduced by 18% and unit variable cost by 6%?

Wildhorse provides shuttle service between four hotels near a medical center and an international airport. Wildhorse uses two 10-passenger vans to offer 12 round trips per day. A recent month’s activity in the form of a cost-volume-profit income statement is shown below.

Calculate the break-even point in dollars.

Umbrella Corp uses LIFO method to report inventory. Inventory at the beginning of the year consisted of 10,000 units of the company's one product for $15 each. During the year:

60,000 units were purchased at the cost of $18 each.

64,000 units were sold.

Near the end of the fiscal year, management is considering purchasing an additional 5,000 units at $18.

What would the effect of this purchase be on income before taxes?

Would the answer be the same if the company used FIFO instead of LIFO?

Note: please provide your answer and explanations on a Word or Excel sheet as hand writing is difficult to read. I would appreciate it.

Digitel Electronics’ engineering and marketing departments have prepared forecasts for the development costs and operating profits of the next generation of their digital electrical meters. Development costs for each of the next three years will be $50,000.Manufacturing equipment costing $100,000 will be purchased near the end of Year 3. Annual profits for the normal five-year product life (Years 4 to 8 inclusive) are projected to be $80,000. The salvage value of the manufacturing equipment at the end of Year 8 is $20,000. Use NPV as your selection criteria. Should Digitel proceed with the product development if its annually compounded cost of capital is: a. 14%? b. 17%?

1. Named perils in an insurance policy

2. All insurance companies are the same and there is no need to shop around for insurances policies for construction project work.

1. Determine the project costs and Budget (Marks-20)

You are a project manager of one of the major construction companies of the region. You got a project of “Toronto Airport” construction. Its quite challenging to complete this huge project on time, so try to devise a strategy to manage this project. Complete the following tasks in this context.

TOPIC:APPLICATION    OF    NEW   CONSTRUCTION METHOD OR TECHNOLOGY FOR SUSTAINABLE HIGHWAY

Write and discuss your ideas to support the Malaysian government on highway construction issues on the use of nano technology.

• Your ideas should be written in FIVE (5) pages. (Including introduction, main paragraph, conclusion and references)

based on highway engineering subject

Highway Project Project

The Department of Highways in South Carolina was exploring ways to reduce the road construction costs and developed new contracting processes to allow the road builders to bring new ideas for cutting costs. On one project, the contractor proposed cost-cutting ideas throughout the life of the project. At each phase, the client accepted many of the ideas and then revised the budget. The client promoted the revised cost target of the project as an example of the success of the new process. By the end of the project, the final cost was less than 1 percent over the newest target. Although the total cost of the project was almost 10 percent less than the original cost projections and contract obligations, the success of the project was connected to the new expectations that developed during the life of the project. Even though this project performance exceeded the original goal, the client was disappointed.

Biotech Project

A biotechnology company developed a new drug that proved to have a large market demand, and the team that developed the drug was assigned to build a new manufacturing facility to produce the drug. The project manager for the construction company that was awarded the contract to build the manufacturing facility managed the project effectively. Every request for a change in scope was approved, and the result was a 20 percent increase
to the total cost of the project. On most projects, a 20 percent increase in the project cost would be considered poor performance. For the client’s project team, who were accustomed to complex projects with a large number of unknown issues that increase the final cost of the project, a 20 percent overrun in cost was not unusual. Even though the project was 20 percent over budget, the client was happy. Client satisfaction is often tied to expectations about project performance. Identifying and managing those expectations is a primary responsibility of the project manager.

Discussion

What are the differences between the two projects? Identify the single most important difference between the two projects that affected client satisfaction. Suggest an approach to managing client expectations in the highway project that might have resulted in meeting or exceeding expectations rather than disappointment.

Upper Division of Lower Company acquired an asset with a cost of $550,000 and a four-year life. The cash flows from the asset, considering the effects of inflation, were scheduled as follows:

The cost of the asset is expected to increase at a rate of 10 percent per year, compounded each year. Performance measures are based on beginning-of-year gross book values for the investment base. Ignore taxes.

Year Cash Flow

1 $200,000

2 $245,000

3 $280,000

4 $305,000

Required:

a. What is the ROI for each year of the asset's life, using a historical cost approach? (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)

ROI

Year

1    _____ %

2   _____ %

3   _____ %

4   _____ %

b. What is the ROI for each year of the asset's life if both the investment base and depreciation are determined by the current cost of the asset at the start of each year? (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)

ROI

Year   

1    _____ %

2   _____ %

3   _____ %

4   _____ %