Conch Republic Electronics

Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. The company originally repaired radios and other household appliances when it was founded more than 70 years ago. Over the years, the company has expanded, and it is now a reputable manufacturer of various specialty electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company in its finance department.

One of the major revenue-producing items manufactured by Conch Republic is a smartphone. Conch Republic currently has one smartphone model on the market and sales have been excellent. The smartphone is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current smartphone has limited features in comparison with newer models. Conch Republic spent $750,000 to develop a prototype for a new smartphone that has all the features of the existing one but adds new features such as wifi tethering. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new smartphone.

Conch Republic can manufacture the new smartphone for $205 each in variable costs. Fixed costs for the operation are estimated to run $5.1 million per year. The estimated sales volume is 64,000, 106,000, 87,000, 78,000, and 54,000 per year for the next five years, respectively. The unit price of the new smartphone will be $485. The necessary equipment can be purchased for $34.5 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $5.5 million.

Net working capital for the smartphones will be 20 percent of sales and will occur with the timing of the cash flows for the year (i.e., there is no initial outlay for NWC). Changes in NWC will thus first occur in Year 1 with the first year's sales. Conch Republic has a 35 percent corporate tax rate and a required return of 12 percent.

Shelly has asked Jay to prepare a report that answers the following questions:

QUESTIONS

1. What is the payback period of the project?What is the profitability index of the project?What is the IRR of the project?What is the NPV of the project?  

*************************************************************** here is a template to begin with

Discuss the nature of an exponentially growing quantity and explain what the term doubling time means. Explain why the problem of exponential growth is easily overlooked. Discuss some of the differences in the factors affecting population growth in the U.S. 25 or 50 years ago compared to now. Discuss demand for resources in a growing population in one area (e.g. town, or county, or country) and globally (world economy, resources, food production supply and demand, living space, etc).

Discuss the nature of an exponentially growing quantity and explain what the term doubling time means. Explain why the problem of exponential growth is easily overlooked. Discuss some of the differences in the factors affecting population growth in the U.S. 25 or 50 years ago compared to now. Discuss demand or resources in a growing population in one area (e.g. town, or county, or country) and globally (world economy, resources, food production supply and demand, living space, etc).

The water works commission needs to know the mean household usage of water by the residents of a small town in gallons per day. They would like the estimate to have a maximum error of 0.1 gallons. A previous study found that for an average family the variance is 6.76 gallons and the mean is 16.1 gallons per day. If they are using a 98% level of confidence, how large of a sample is required to estimate the mean usage of water? Round your answer up to the next integer.

Assume that 61% of population in UK vote for Candidate A. The rest of population vote for Candidate B. If we randomly select 36 people in town,
i. What is the center and dispersion of the proportion of voters supporting candidate A in the sample? Can you determine the (approximate) shape of the distribution? Why?
ii. What is the probability that the sample proportion supporting candidate A is less than 60%?
iii. What is the probability that the sample proportion of voters supporting candidate B is greater than 40%?

10) a) A small island is 2 miles from the nearest point P of a straight shoreline. If a woman on the island can row a boat 3 miles an hour and can walk 4 miles an hour, where should the boat be landed in order to arrive at a town 10 miles down the shore from P, in the least time? b) Suppose instead that the woman uses a motorboat that goes 20 miles per hour. Then where should she land?

The water works commission needs to know the mean household usage of water by the residents of a small town in gallons per day. They would like the estimate to have a maximum error of 0.15 gallons. A previous study found that for an average family the standard deviation is 2.5 gallons and the mean is 15.2 gallons per day. If they are using a 80% level of confidence, how large of a sample is required to estimate the mean usage of water? Round your answer up to the next integer.

You plan to deposit $5,500 into a savings account. There are five great banks in your town offering terrific interest rates. If your goal is to earn the greatest amount of interest, which bank should you choose? Please explain why.

Bank KLM: 3.66% compounded continuously

Bank HIJ: 3.71% compounded semi-annually

Bank DEF: 3.70%, compounded monthly

Bank XYZ; 3.64% compounded quarterly

Bank ABC: 3.74%, compounded annually

Assuming that a partnership normally has a calendar year-end, what should the tax year-end be in the following independent cases? ?

a. Jim, a 70 percent partner, sells his partnership interest to Fred on August 10.

b. On July 13, the partnership sells its office building and moves its business across town.

c. June buys a 15 percent interest in the partnership on May 14.

d. The partnership goes out of business on February 26.

Jonathan is a scientist for a local manufacturer that employs a large percentage of the small town where he lives. Until recently, Jonathan loved his job. However, it has been discovered that the company is releasing small amounts of toxins into the local river. Jonathan is extremely bothered by this information. Based on what you know about Jonathan, describe the cognitive dissonance that he is experiencing and two ways that Jonathan can alter his behavior or attitude to reduce the dissonance.