Solar Engines manufactures solar engines for tractor-trailers. Given the fuel savingsavailable, new orders for 135 units have been made by customers requesting credit. Thevariable cost is $9,600 per unit, and the credit price is $11,750 each. Credit is extendedfor one period. The required return is 1.8 percent per period. If Solar Engines extendscredit, it expects that 20 percent of the customers will be repeat customers and placethe same order every period forever and the remaining customers will be one-timeorders. Calculate the NPV of the decision to grant credit. (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g., 32.16.)O Answer is complete but not entirely correct.NPV$5,386,717.95

Net Present Value (NPV) of a project is the cost and benefit analysis of the investment. All the…

Answered: Solar Engines manufactures solar…

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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In the coming year, Urayse, Inc. will be introducing its first product, a wrist brace that protects serious video gamers from repetitive-motion injuries. The brace will be sold for $11.25 to retailers throughout the country. All sales will be made on account. An expected 65% of sales will be collected within the quarter of the sale, and another 30 % in the quarter following the sale. The remaining 5% of credit sales are expected to be uncollectible. The sales budget for the coming year is as follows Budgeted sales units 1st Quarter: 25,000 2nd Quarter: 40,000 Prepare Urayse, Inc.'s, cash receipts budget for the coming year. 3rd Quarter:50,000 4th Quarter: 80,000
Sports Haven purchased 600 bottles of flavored water at $1.40 each. Experience has indicated that, due to expiration dates, 5% of the bottles will be sold at cost. Find the price at which the bottles of flavored water must be sold to cover a 15% markup on selling price. Round to the nearest cent.
Solar Engines manufactures solar engines for tractor-trailers. Given the fuel savings available, new orders for 170 units have been made by customers requesting credit. The variable cost is $11,000 per unit, and the credit price is $13,500 each. Credit is extended for one period. The required return is 1.6 percent per period. If Solar Engines extends credit, it expects that 15 percent of the customers will be repeat customers and place the same order every period forever and the remaining customers will be one-time orders. Calculate the NPV of the decision to grant credit. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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In the coming year, Marigold, Inc. will be introducing its first product, a wrist brace that protects serious video gamers from repetitive-motion injuries. The brace will be sold for $ 17.00 to retailers throughout the country. All sales will be made on account. An expected 65% of sales will be collected within the quarter of the sale, and another 30% in the quarter following the sale. The remaining 5% of credit sales are expected to be uncollectible. The sales budget for the coming year is as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted sales units 20,000 41,000 59,000 82,000 Prepare Marigold, Inc.'s cash receipts budget for the coming year. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0. Round "Budgeted sale price" and "Cash Receipts Budgets" answers to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.) Sales Budget 1st Quarter 2nd Quarter…
Lotus Development has a software rental plan called SmartSuite that is available on the world wide web. A number of programs are available at $2.99 for 48 hours. If a construction company uses the service an average of 48 hours per week, what is the present worth of the rental costs for 10 months at an interest rate of 1% per month compounded weekly? Assume 4 weeks per month.
Zozan Corp. manufactures Hydrogen engines automobiles. Recently 450 new orders placed by customers requesting credit. The variable cost is $35,000 per unit, and the credit price is $43,000 each. Credit is extended for one period, and based on historical experience, payments for 20% of the orders are never collected. The required return is 4% per period. Assuming a repeat customer, should it be filled by the firm? The customer will not buy if credit is not extended
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Relling Corporation manufactures a drink bottle, model CL24. During 2017, Relling produced 210,000 bottles at a total cost of $808,500. Kraff Corporation has offered to supply as many bottles as Relling wants at a cost of $3.75 per bottle. Relling anticipates needing 225,000 bottles each year for the next few years. Q. What other information would you need to be confident that the equation in requirement 2 accurately predicts the cost of manufacturing drink bottles?
Solar Engines manufactures solar engines for tractor - trailers. Given the fuel savings available, new orders for 175 units have been made by customers requesting credit. The variable cost is $11, 200 per unit, and the credit price is $13, 750 each. Credit is extended for one period. The required return is 1.7 percent per period. If Solar Engines extends credit, it expects that 35 percent of the customers will be repeat customers and place the same order every period forever and the remaining customers will be one time orders. Calculate the NPV of the decision to grant credit. (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)
Saxon Corporation sells a product for $48 with costs of $33 per unit. Saxon uses a 9% rate of return for all its calculations. The CFO estimates that there is a 20% probability of a prospective new customers seeking credit will go bankrupt within the next 6 months. Customer wishes to place an order for 1,000 units of the product. Multiple Choice O Extend credit; total benefit of $3,780 Extend credit; total benefit of $3,880 Extend credit; total benefit of $3,980 Extend credit; total benefit of $4,080
In the coming year, Concord, Inc. will be introducing its first product, a wrist brace that protects serious video gamers from repetitive- motion injuries. The brace will be sold for $13.00 to retailers throughout the country. All sales will be made on account. An expected 65% of sales will be collected within the quarter of the sale, and another 30% in the quarter following the sale. The remaining 5% of credit sales are expected to be uncollectible. The sales budget for the coming year is as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted sales units 29,000 41,000 57,000 77,000 Prepare Concord, Inc's cash receipts budget for the coming year. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0. Round "Budgeted sale price" and "Cash Receipts Budgets" answers to 2 decimal places, eg. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

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