Maintenance & Repair= GH¢ 5,000• General Expenses at 100% ProductionAdministration= GH¢16,000Advertising DistributionGH¢40,000Salvage Value= 5% of Initial Fixed Capital Investment (CF)Service Life12 year%3!- Hurdle rate= 12%Tax Rate= 25%Assume the production rate is 60% the first two years, 80% the next four years and100% the remaining years, likewise the manufacturing cost and the general expenses.Determine:Payback Period (PBP)Return on Investment (ROI) Sales/RevenueGH¢5.00/kgProduction rate @ 100%= 375,000kg/yr• Total Initia) Fixed Capital Investment (CT) = GH¢850,000= 15% of Total Initial fixed Capital Investment%3D• Working Capital (Cw)(CT)Manufacturing Cost at 100% ProductionRaw Materials= GH¢40,000LabourGH¢30,000Electricity= GH¢15,000%3DWater= GH¢ 3,000%3DMaintenance & Repair= GH¢ 5,000• General Expenses at 100% ProductionAdministration= GH¢16,000

Before investing in new assets or investment, profitability is evaluated by using various methods…

Sales/Revenue GH¢5.00/kg • Production rate @ 100% = 375,000kg/yr • Total Initial Fixed Capital Investment (CT) = GH¢850,000 • Working Capital (Cw) = 15% of Total Initial fixed Capital Investment (Ст) Manufacturing Cost at 100% Production - Raw Materials GH¢40,000 Labour GH¢30,000 %3D Electricity - GH¢15,000 %3D - Water = GH¢ 3,000 Maintenance & Repair = GH¢ 5,000 • General Expenses at 100% Production Administration GH¢16,000

Sales/Revenue GH¢5.00/kg • Production rate @ 100% = 375,000kg/yr • Total Initial Fixed Capital Investment (CT) = GH¢850,000 • Working Capital (Cw) = 15% of Total Initial fixed Capital Investment (Ст) Manufacturing Cost at 100% Production - Raw Materials GH¢40,000 Labour GH¢30,000 %3D Electricity - GH¢15,000 %3D - Water = GH¢ 3,000 Maintenance & Repair = GH¢ 5,000 • General Expenses at 100% Production Administration GH¢16,000

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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please answer complete and correct with full working and steps need correct answer with all work thanks
2. The Gustavo Industries in São Paulo, Brazil, reported the following results for 2020 (currency in Brazilian real, R$):« Sales R$ 400,000,000- 320,000,000- 40,800,000- 280,000,000- Variable costs Controllable fixed costs Average operating assets Gustavo's Management is considering the following independent courses of action in 2021 in order to maximize the return on investment for this division: Option1: Reduce average operating assets by R$ 80,000,000 with no change in controllable margin. Option2: Increase sales R$ 80,000,000 with no change in the contribution margin percentage. A. Compute the controllable margin and the return on investment for 2020. (25%)- B. Compute the controllable margin and the expected return on investment for each proposed option. (25%)-
Q.1 KrishnaGems Ltd has just installed Equip.-R at a cost of Rs 2,00,000. Themachine has a five yearlife with no residual value. The annual volume ofproduction is estimated at 1,50,000 units, which can be sold at Rs 6 per unit.Annual operating costs are estimated at Rs 2,00,000 (excludingdepreciation) at this output level. Fixed costs are estimated at Rs 3 per unitfor the same level of production. KrishnaGems Ltd has just come acrossanother model called Equip.-S capable of giving the same output at anannual operating cost of Rs 1,80,000 (exclusive of depreciation). There willbe no change in fixed costs. Capital cost of this machine is Rs 2,50,000 andthe estimated life is for 5 years with no residual value.The company has anoffer for sale of Equip.-R at Rs 1,00,000. The cost of dismantling andremoval will be Rs 30,000. As the company has not yet commencedoperations, it wants to sell Machine-R and purchase Equip.-S. Nine GemsLtd will be a zero-tax company, for seven years in view of…
Asset A and B are operated by us. Asset C is operated by another company. The following costs occur: Asset Asset Asset A В Our Gross Costs 1,250,000 3,300,000 500,000 Equity Share 55% 42% 15% The company that operates Asset C has also sent us a report showing their total GROSS costs of £5,200,000. What are the NET costs of all 3 assets?
ch7-50 Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales $ 12,150,000 Total variable cost 7,533,000 Contribution margin $ 4,617,000 Total fixed cost 2,875,878 Operating income $ 1,741,122 Required: 1(a). Compute variable cost per unit. Enter your answer to the nearest cent.$per unit 1(b). Compute contribution margin per unit. Enter your answer to the nearest cent.$per unit 1(c). Compute contribution margin ratio. % 1(d). Compute break-even point in units. units 1(e). Compute break-even point in sales dollars.$ 2. How many units must be sold to earn operating income of $376,542? units 3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.$ 4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars. Margin of safety in units units Margin of safety in sales dollars $ 5. Compute the degree…
ACG Manufacturing Ltd Statement of comprehensive 31/12/20X1 £'000 Total Unit % New project Sales(1000units) 250.000 250 100 VC 150.000 150 60 CM 100.000 100 40 FC 60.000 EBIT 40.000 Ex4: Prepare the I.S if: ACG replace paying fixed salary of £10,000/year by paying regarding to number of product sold at £20/unit Effect: Sales volume increase by 20% income as year ended at
Sales revenue is $11,250,000 Variable expenses is $2,500,000 Total expenses is $8,750,000 Operating income is $2,5000,000 How would you find the degree of operating leverage?
Sales (30,000units) P 150,000 Variable costs 100,800 Contribution margin P 49, 200 Fixed manufacturing costs 24,000 Operating income P 25,200 Interest 18,000 Earnings before taxes P 7,200 Taxes (at 31%) 2,160 Net income P 5,040 Shares outstanding 600 The degree of combined leverage…
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