EMU ELECTRONICS

Emu electronics is an electronics manufacturer located in Box Hill, Victoria. The company’s managing director is Shelly Chan, who inherited the company from the father. The company originally repaired radios and other household appliances when it was founded more than 50 years ago. Over the years. The company has expanded, and it is now a reputable manufacturer of various specialty electronics items. Robert McCanless, a recent MBA graduate, has been hired by the company in the finance department.     

One of the major revenue-producing items manufactured by Emu electronics is a smart phone. Emu electronics currently has a smart phone model on the market and sales have been excellent. The smart phone is a unique item in that it comes in a variety of colours and is pre-programmed to play Jimmy Barne’s music. However, as with any electronic item, technology changes rapidly, and the current smart phone has limited features in comparison with newer models. Emu electronics has spent $1 200 000 developing a prototype for a new smart phone that has all the features of the existing one, but adds new features, such as Wifi tethering. The company has spent a further $250 000 for a marketing study to determine the expected sales figures for the new smart phones.

   Emu electronics production manager has produced estimates of the costs associated with manufacture of the new smart phone. Variable costs are estimated at $210 per unit and fixed costs for the operation are expected to run at $5.3 million per year. The estimated sales volume is 64 000 units in the year 1; 106 000 units in the year 2; 87 000 units in the year 3; 78 000 units in Year 4; and 54 000 units in the final year. The unit price of the smart phone will be $515. The necessary manufacturing equipment can be purchased for $38.5 million and will be depreciated for tax purposes over a seven-year life (straight-line to zero). It is believed the value of the manufacturing equipment in five years’ time will be $5.8 million.

    Net working capital for the smart phones will be 20% of sales and will have to be purchased at the end of the year. The cost of the raw materials is reflected in the variable unit cost. Changes in NWC will first occur at the end of Year 1 based on the first years’ sales. Emu electronics has a 30% corporate tax rate and a 12% required return.

    Shelly has asked Robert to prepare a report that answers the following questions.

Based on the given data, pls find below steps, workings, data and
answers:
1. What is the payback period of the project?
2. What is the profitability index of the project?
3. What is the IRR of the project?
4. What is the NPV of the project?
5. How sensitive is the NPV to changes in the price of the smart
phone?

6. How sensitive is the NPV to changes in the quantity
sold?

7. Should Emu electronics produce the new smart phone?

NOTE: Please show full working and explanation on the steps.

Ana is a 15-year-old high school student who is active in school activities, loves to run and bike, and has a 3.95 grade point average. She has a close group of friends that she spends her free time with; her parents are very proud of her for her outstanding academic performance.

School Nurse Visit: Ana is being seen at the school clinic for a sore throat and fever. The nurse takes her height (5’3”) and weight (107 lb). Ana is diagnosed with strep throat infection and is given antibiotics.

Sports Physical Visit: Ana is seen 4 months later (in early fall) by her pediatrician for a sports physical, since she is planning to join the cross-country running team. Weight at this time is 96 pounds. The physician notes that Ana seems to be tired and has lost weight since her most recent visit to the clinic. Ana replies that she has had a lot of sinus and other infections, which causes her to lose her appetite. She also notes that she has been training hard to make the cross-country team but that her training should become less intense now that she has made the team. Ana assures the physicians that she will try to eat more in the future. They physician encourages her to eat a lot of carbohydrates and protein to improve her sports performance.

Pre-employment Physical Visit: Ana is seen by her family physician for a pre-employment physical in early June. At this time her weight is 91 pounds. The physician is concerned about her weight, but Ana assures her that she looks and feels fine. The MD refers her to the outpatient clinical dietitian. During the interview with the dietitian, it is noted that Ana eats only twice a day, with many diet beverages in between these meals. The dietitian suggests that Ana increase her weight to at least 95 pounds, but she refuses, stating that at this weight she would “have too much fat in her thighs” for running. When asked about the use of diet pills, laxatives, and other diet aids, Ana states that she doesn’t need these because she has enough willpower to reduce her food intake on her own. She also denies vomiting after eating. When asked about her willingness to reduce her running so that she could reach a more healthy weight, Ana get agitated. The dietitian asks Ana how she determines how much or how long she needs to run. Ana states that she runs as long as she needs to so that she can use up all of the calories she has eaten. When the dietitian suggests that this is compensatory exercise and is a form of purging, Ana becomes upset and leaves. The dietitian looks for her parents in the waiting room, and lets Ana’s mother know that she thinks there may be an eating issue that the family should deal with. The mother thanks the dietitian for letting her know and leaves, as Ana has already gone to the parking lot.

The dietitian confers with the physician and her parents are send information about eating disorders, including possibly outcomes and treatment options. Three months later, the clinic is notified that Ana has fainted at gym class in school and that the hospital where she was taken has referred her for an in-patient eating disorder evaluation.

1. For the school nurse visit, what is Ana’s BMI? What percentile does Ana’s weight fall at during the school nurse visit? How would you classify Ana’s weight status at the school nurse visit? (3 points)
2. Calculate BMI and percentile from the sports physical visit. How would you classify her weight status at the sports physical visit? (2 points)
3. What advice would you give to Ana in terms of pre-event sports nutrition? (6 points)
4. Calculate BMI and percentile from the pre-employment physical visit? How would you classify her weight during the pre-employment physical visit? (2 points)
5. What eating issue would you suspect Ana has? Why? (6 points)
6. What are the long-term outcomes and prognosis of this issue? (6 points)

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