2.
You are a financial analyst for a company that makes guitars. You have several high-quality guitars in your product line, but are considering adding one more. This model is very high end and only for the serious player. You have been charged with determining whether the project should move forward. Here’s what you think...
You are budgeting this as a five-year project. For the first year, you project you will sell 75 guitars at a cost of $1,000. For the second year, sales will increase to 100. Finally, for years 3-5, you think sales will stabilize at 200 for each year. The cost of the guitars will be a steady 40% of sales each year. The project will have a tax rate of 21%. The project will require Capital Spending of $100,000 at initiation, along with an increase in Net Working Capital of $40,000. The NCW cannot be depreciated, but the Capital Spending will be depreciated as a three-year MACRS property class. Those percentages are 33.33%, 44.44%, 14.82%, and 7.41% in years 1-4, respectively. You can recover 50% of the increase in NWC at the end of the project and will sell some of the equipment from the Net Capital Spending for an estimated total of $15,000 at the end. Finally, the project is expected to have a required return of 9%.
A. What is the Net Present Value (NPV) of the project? (20 pts)


B. What is the Payback Period? (20 pts)

1. Suppose that real GDP is currently $15 trillion and the MPC is .8. How much would government have to increase spending to increase real GDP by $5 trillion?
2. If the MPC is .7 and government decreased spending by $500 billion, what is the spending multiplier and by how much would real GDP decrease?

I do not understand question number three. However, I belive the answers to questions number 1 and 2 are already on chegg I just need clarification with how to do question number 3. PLEASE HELP

Q. 1.    Prepare a budgeted income statement for Premium Grade Ovenware for 2007 if the engineers’ redesign efforts had worked as originally planned. Use these assumptions:

First quarter sales of 1,500,000 units will be achieved each quarter in 2007.

The selling price for 2007 will remain 10% below the price charged from 2002-2006, and there were no sales price increases during the 2002-2006 period.

Variable cost of goods sold averaged about $5.55 per unit of ovenware from 2002-2006.

Variable production costs will be reduced by 35% due to the new design.

The fixed cost of production in 2006 contained one-time, increased costs (about $4,000,000) for the design changes. For 2007, fixed costs are expected to be about 3.5% higher than 2005.

Marketing costs contain both fixed and variable elements, however, it is budgeted based on spending 7% of expected sales revenue.

Other fixed costs are expected to increase about 2.5% over 2006.

Would the product manager have met his profit target of 25% return on sales in 2007 for the product line with the redesign?

Q. 2.    Prepare the budgeted 2007 income statement for Premium Grade Ovenware that the production, quality, and product managers considered when they discussed the first option available to them.

a.   Under that option, shipment would be delayed and about one third of the year’s sales of 6,000,000 units would be lost.

Product would be sold at the 10% price reduction but produced under the old cost structure for six months (variable production costs of $5.55 per unit). After the six months the variable cost savings of 35% would be achieved.

Assume that recycling the current production would add $500,000 to the fixed production costs originally budgeted for 2007. In addition, the product line will incur an additional $2,000,000 in design engineering to solve the problem within a 6-month period (this will involve the use of overtime and consultants).

Other cost items would stay as originally budgeted for 2007.

What would the product line’s profit be under this alternative? What would the return on sales for the product line be?

Q. 3.     The production, quality and product managers considered their second option to be producing and selling flawed units for 6 months while engineers corrected the problem. Under this option, the company would not disclose the problem and hope for the best. Perhaps none of the product claims would involve any injury; only product replacement would be required at a cost of about $12 per unit.

a.    Adjust the 2007 budget for an assumed defect rate of .25% for 6 months production. (Note this is a defect rate in addition to the normal rate faced in each year, 2002-2006, which is already accounted for in marketing cost.)

b.   Adjust the fixed production cost for 2007 for an additional $2,000,000 in design engineering to solve the problem within a 6-month period. (This will involve the use of overtime and consultants).

What would the budgeted profit and return on sales be if option two were selected?

If the engineer’s redesign efforts had worked originally, the Budgeted Income Statement for Premium Grade Overnware in 2007 would have been:

Since the budgeted profit target is 33.66%, the product manager met his profit target of 25% return on sales in 2007 for the product line with the redesign.

The production, quality, and product managers used this budgeted income statement to consider the first option that was given:

2)

Water flows vertically out of a circular faucet that has a diamter d=0.050m, height = 0.55m, speed after falling that height = 3.58 m/s.

What is the volume of water that exits the faucet in 2.0 seconds? Please write formula used to solve this eq.

QUESTION 21 A newspaper story recently reported that the price of new cars has decreased and the quantity of new cars sold has dropped. A possible cause of these changes is:

A.Increase in income

B.Decrease in production costs

C.An increase in the price of gasoline

D.An increase in the cost of metals used to build cars.

QUESTION 22 Suppose the price of oranges rises. Then we would expect the supply of oranges to:

A.Shift right

B.Shift left

C.Increase either way

D.Stay the same

QUESTION 23 Suppose you observe the price of new cars falling while the quantity of new cars increased. This can be explained by

A change in supply due to lower production costs

A change in demand due to higher incomes

A change in demand due to decreased preferences for cars over trucks

A change in demand due to falling incomes

A bucket of water of mass 16.0 kg is suspended by a rope wrapped around a windlass, that is a solid cylinder with diameter 0.320 m with mass 13.0 kg . The cylinder pivots on a frictionless axle through its center. The bucket is released from rest at the top of a well and falls a distance 10.6 m to the water. You can ignore the weight of the rope.

What is the tension in the rope while the bucket is falling?

Take the free fall acceleration to be g = 9.80 m/s2 .

With what speed does the bucket strike the water?

Take the free fall acceleration to be g = 9.80 m/s2 .

What is the time of fall?

Take the free fall acceleration to be g = 9.80 m/s2 .

While the bucket is falling, what is the force exerted on the cylinder by the axle?

Take the free fall acceleration to be g = 9.80 m/s2 .

A mixture contains 2.3 mol of cyclohexane (C₆H₁₂) and 3.8 mol of 2-methylpentane (C₆H₁₄). At 35°C, the vapor pressure of cyclohexane is 150 torr and that of 2-methylpentane is 313 torr. Assume this is an ideal solution. What is the vapor pressure of cyclohexane above the solution?

Consider the following sample of data.

For this data, we have that:

• SXX=  
• SYY=
• SXY=
• β^0=
• β^1=
• The test statistic for the test that β1=0 is:

What are the differences between consumer and industrial goods, and what are the implications for international marketing?

Question 6

Why hasn’t the United States been more helpful in setting universal standards for industrial equipment? Do you feel that the argument is economically sound? Discuss.

Question 16

England has almost completed the process of shifting from the inch-pound system to the metric system. What effect do you think this will have on the traditional U.S. reluctance to make such a change? Discuss the economic implications of such a move.

Question 3

Discuss the ways Japanese manufacturers control the distribution from manufacturer to retailer.

Question 15

One of the first things companies discover about international patterns of channels of distribution is that in most countries, it is nearly impossible to gain adequate market coverage through a simple channel-of-distribution plan. Discuss.