Provide correct answer general accounting Assume you have developed and tested a prototype electronic productand are about to start your new business. You purchase preprogrammedcomputer chips at $70 per unit. Other component costs include plasticcasings at $15 per unit and assembly hardware at $5 per unit.Direct labor costs are $15 per hour and three units can be produced perhour. You intend to sell each unit at a 50 percent markup over the totalcosts of producing each unit. The plan is to produce 500 product units permonth in January, February, and March. Sales are expected to be 200 unitsin January, 400 units in February, and 800 units in March.Calculate the dollar amount of sales revenue expected in each month (i.e.,January, February, and March) and for the first quarter of the year.

Step 1: Define SalesWhen a vendor of products or services passes the ownership of the goods to a…

Answered: Assume you have developed and tested a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the gross profit margin % ?
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You are investigating the cost of project to renovate the kitchens in a large apartment building, the payments for this work will be $32,500 up front and $13500 a month for 8 months, followed by a completion payment of $31500. To start this project you will need to purchase equipment for $70,000 at the beginning of the project and you expect monthly materials and operating costs to be about $7,500. The Rate of Return is 12%. What is the total PV of the 8 monthly payments of $13500 per month. You should assume that the payments are made at the end months 1 through 8. (So this is a ordinary simple annuity). Round your answer to the nearest penny. Your Answer: Answer
You are entering the widget business. It costs$500,000, payable in year 1, to develop a prototype.This cost can be depreciated on a straight-line basisduring years 1–5. Each widget sells for $40 and incursa variable cost of $20. During year 1, the market sizeis 100,000, and the market is growing at 10% peryear. You believe you will attain a 30% market share.Profits are taxed at 40%, but there are no taxes onnegative profits.a. Given your other assumptions, what market share isneeded to ensure a total free cash flow (FCF) of $0over years 1 to 5? (Note: FCF during a year equalsafter-tax profits plus depreciation minus fixedcosts, if any.)b. Explain how an increase in market share changesprofit.c. Explain how an increase in market size growthchanges profit.d. Use Excel’s auditing tool to show how the marketgrowth assumption influences your spreadsheet.
What is the gross profit margin % ? Accounting
You are considering buying a piece of industrial equipment to automate a part of your production process. This automation will save labor costsby as much as $42,000 per year over 12 years. Theequipment costs $270,000. Should you purchase theequipment if your interest rate is 10%?
You are graduating soon and would like to start your own business manufacturing wine coolers. You collect the following information on the initial costs: Cost of Plant and Equipment = $500,000 Licensing and Legal Costs = $50,000 You can already claim an investment tax credit of 10% on plant and equipment, and the licensing and legal costs have already been incurred. You estimate that you can sell 1 million bottles a year at $1 a bottle. You estimate your costs as follows: Variable costs/bottle = $ 50 cents Fixed costs/year = $200,000 Assume that you had borrowed 60% of your initial investment in the previous question, using a five-year term loan, with an interest rate of 7.5%. Estimate the cash flows to equity on this project.
Finozest Solutions is considering setting up a facility to manufacture computers. The manufacturing facility will cost K15 million to build and will have the capacity to sell 50,000 computers a year. Each computer is expected to sell retail for K2,800, and the cost of making each computer is expected to be K1,400. The fixed costs amount to K150,000 per year are expected to be incurred. The business will run for five years, at which time you estimate the market value of the facility to be zero. The discount rate is estimated at 10%, and the tax rate is 40%. (a) Estimate the accounting rate of return expected from his investment. (b) Using the net present value technique for project evaluation, advise Finozest solutions on whether they should undertake this project. (c) After the release of the latest GDP projections for the country, you now estimate that at the end of 5 years, you could sell the facility for K5 million. Estimate the breakeven rate for the project.
XYZ Corporation is considering a new product line. They believe the new product can be sold for $10 per unit and will have the following demand over the next 3 years: 10,000 units in year 1, 15,000 in year 2 and 17,000 in year three. The incremental costs of these products will consume 50% of the sale price. The new line will require a machine be purchased today for $60,000 and depreciated using the straight line method over the life of the machine with a salvage value of zero. The project will utilize $30,000 in net working capital and the company’s tax rate is 30%. Which of the following are true regarding the project’s relevant cash flows for year 0, 1, 2, 3. I, II & III are correct b. I. The company’s year zero cash flow is (-$60000) c. II. The company’s cash flow in year 1 is $41,000 d. II & III are correct e. III. The company’s cash flow in year 3 is 65,500
Acme Products, Inc. is interested in producing and selling an improved widget. Market research indicates that customers would be willing to pay $90 for such a widget and that 50,000 units could be sold each year at this price. If Acme Products requires a 75% return on sales to undertake production, what is the target cost for the new widget? Select one: O a. $31.50. O b. $67.50. OC. $58.50. Od. $22.50.

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