2. Pigafetta made a PP1,000,000.00 investment in an endeavor whereby he manufactures products that are easily sold at P5,000.00 per unit. Per computation, the Payback Period is just two (2) years. If the total cost incurred by his company during a year is P2,100,000.00, a) What do you think is the number of products that his company was able to sell during the year? b) If his target is to attain a 15% Rate of Return, do you think that Pigafets has achieved his goal? Why?

2. Pigafetta made a PP1,000,000.00 investment in an endeavor whereby he manufactures products that are easily sold at P5,000.00 per unit. Per computation, the Payback Period is just two (2) years. If the total cost incurred by his company during a year is P2,100,000.00, a) What do you think is the number of products that his company was able to sell during the year? b) If his target is to attain a 15% Rate of Return, do you think that Pigafets has achieved his goal? Why?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

You’re trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $18.6 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,815,000, $2,145,000, $2,034,000, and $1,326,000 over these four years, what is the project’s average accounting return (AAR)? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You are considering whether or not to purchase another new air conditioner refrigerant recovery machine that costs RM13600.00 per piece. He knows that his total earnings for the past three years (sales for air conditioning service) have averaged RM33600.00 per year for 5 working days a week and have remained steady. You are sure that you will be able to sell another 200 air conditioning service per year for RM80.00 labor a piece as a result of having this new capability. You decided: i. Calculate and explain what would your shop ROI be over three years by taking this opportunity based on the information. ii. Calculate the ROI percentage (%) for the new machine's sales.
A company is considering purchasing a new piece of machinery at a cost $60,000. It is expected to generate revenues of $20,000 per year for 4 years against $3,000 of annual operating expenses. The machinery is MACRS 3-year property. The income tax rate is 25%. MARR is 10%. What is the EVA for year 3?
Inc. uses fine-tuned equipment to produce electronic products. Each one of its machines costs $10,000,000 to purchase plus an additional $900,000 a year to operate. The machines have a 6-year (6) life after which they are worthless. What is the equivalent annual cost of one these machines if the required return is 11.4 percent?
2
HELP ME
am. 117.
A firm has invested $50,000 in equipment with a 5-year useful life. The machinery will have a salvage value of $5,000. The annual benefits from the machinery are $13,000 for the first year and increase by $2,000 per year. Assume a combined 30% income tax rate, and the firm uses the SOYD depreciation. Calculate the before-tax IRR. Calculate the after-tax IRR.
You are analyzing a property that popped up on CREXI. Real estate taxes and management services cost 42,362 and 31,563, respectfully. Other expenses are 15,369. If your company’s required return is 10%, what must the average annual rent be over the next five years for you to purchase the property at $400,000 and obtain that 10%? Expenses grow at 2.5% per year. A. 189,500 B. 198,400 C. 201,300 D. 192,700 E. 209,500
1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. 2-a. Compute the simple rate of return promised by the outlet. 2-b. If Mr. Swanson requires a simple rate of return of at least 18%, should he acquire the franchise? 3-a. Compute the payback period on the outlet. 3-b. If Mr. Swanson wants a payback of two years or less, will he acquire the franchise?
Alpha company invested $10,000,000 in manufacturing equipment for producing small wastebaskets. If the company uses an interest rate of 15% per year, the amount of money it will have to earn each year to recover its investment in 7 years is closest to: Select one: a. $6,403,600 b. $4,403,600 c. $2,403,600 d. $9,403,600

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