Problem 10-29 Break-Even Cost [LO2]Light emitting diode (LEDs) light bulbs have become required in recent years, but dothey make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.52and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.75 andlasts for 12,000 hours. A kilowatt hour of electricity costs $.128. A kilowatt-hour is 1,000watts for 1 hour. However, electricity costs actually vary quite a bit depending on locationand user type. An industrial user in West Virginia might pay $.04 per kilowatt-hourwhereas a residential user in Hawaii might pay $.25. You require a return of 11percent and use a light fixture 500 hours per year. What is the break-even cost perkilowatt-hour? (Do not round intermediate calculations and round your answer to 6decimal places, e.g., 32.161616.)× Answer is complete but not entirely correct.Break-even cost$0.004611 x

Answered: Image /qna-images/answer/550842c6-f862-49f4-a8f1-bf29018e6efc.jpg

Answered: Problem 10-29 Break-Even Cost [LO2]…

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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Problem 9-34 (Algo) Yield on Investment [LO9-4] C. D. Rom has just given an insurance company $46,500. In return, he will receive an annuity of $6,600 for 20 years. At what rate of return must the insurance company invest this $46,500 in order to make the annual payments? Use Appendix D for an approximate answer, but calculate your final answer using the financial calculator method. Note: Do not round Intermediate calculations. Round your final answer to 2 decimal places. Rate of return 6.35 %
Problem 11-27 Scenario Analysis [LO2] Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production. You will need an initial $5,300,000 investment in threading equipment to get the project started; the project will last for 6 years. The accounting department estimates that annual fixed costs will be $1,275,000 and that variable costs should be $240 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life. It also estimates a salvage value of $650,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $350 per ton. The engineering department estimates you will need an initial net working capital investment of $510,000. You require a return of 14 percent and face a tax rate of 25 percent on this project. a-1. What is the estimated OCF for this project? (Do not round intermediate calculations and round your…
FINA 340 Long Horizon NPV Problem (terminal value) Beta Compounding Pharmaceuticals is about to launch a new specialty drug for arthritis. It has been working on this drug for around 10 years and has spent in excess of $4 million in research and development to date. It will need to spend $400,000 on new equipment for a production facilities upgrade to be able to produce the new drug. The company estimates that an additional $50,000 will be required This equipment will be to train current workers on the new equipment before production can begin. depreciated on a straight line basis over 5 years with no planned salvage value. Beta estimates that it will have to add about $10,000 in net working capital before production begins. Beta also estimates that it will have to market the new drug at an initial cost of $100,000, with incremental marketing costs of at least $25,000 for the next three years. The company believes that the drug will continue to be sold for a long period of time, at…
es Problem 2-30 CCA and UCC (LO5) Our new computer system cost us $136,000. We will outgrow it in five years. When we sell it, we will probably get only 10% of the purchase price. CCA on the computer will be calculated at a 30% rate (Class 10). Calculate the CCA and UCC values for five years. (Round your intermediate calculations and final answers to 2 decimal places. Omit $ sign in your response.) Year 1 2 3 4 5 $ $ $ $ $ $ CCA 61200 Ending UCC $ 74800 $ $ $ $ What will be the after-tax proceeds from the sale assuming the asset pool remains open? Assume a 40% tax rate. (Omit $ sign in your response.) After-tax proceeds
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Problem 11-13 Operating Cash Flow and Leverage [LO4] A proposed project has fixed costs of $86,000 per year. The operating cash flow at 8,200 units is $93,800. Ignore the effect of taxes. a. What is the degree of operating leverage? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) b. If units sold rise from 8,200 to 8,700, what will be the new operating cash flow? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. If units sold rise from 8,200 to 8,700, what is the new degree of operating leverage? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) a. DOL b. New OCF c. New DOL
Ch 25 Pro. 2 Please give me step by step instructions to calculate the answer. Average Rate of Return—Cost Savings Master Fab Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $99,000 with a $9,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $22,950 per year. In addition, the equipment will have operating and energy costs of $4,770 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent.__________________ % Liz C
Q- V Please do not give a hand writting photo
Exercise 23-10 (Algo) Keep or replace LO P5 Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $49,000 and a remaining useful life of five years. It can be sold now for $59,000. Variable manufacturing costs are $49,000 per year for this old machine, Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Purchase price Variable manufacturing costs per year (a) Compute the income increase or decrease from replacing the old machine with Machine A (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) if the machine should be replaced, which new machine should Lopez purchase? Req A Complete this question by entering your answers in the tabs below. Revenues Machine A: Keep or Replace Analysis Req B Compute the income increase or decrease from replacing the old machine…
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