not use ai please ts6rt 2 of 2!Required informationA process for producing the mosquito repellant Deet has an initial investment of $180,000 with annual costs of$50,000. Income is expected to be $90,000 per year.What is the annual breakeven production quantity for both payback periods if net profit, that is, income minus cost, is $10 per gallon?eBookWhen i=0%, the annual breakeven production quantity is determined to begallons per year.HintWhen /= 12%, the annual breakeven production quantity is determined to begallons per year.Printferences

The market price of an item is compared to its initial cost to get the breakeven point (also known…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Chambers Company has just gathered estimates forconducting a break-even analysis for a new product.Variable costs are $7 a unit. The additional plant willcost $48,000. The new product will be charged $18,000a year for its share of general overhead. Advertisingexpenditures will be $80,000, and $55,000 will be spenton distribution. If the product sells for $12, what is thebreak even point in units? What is the break even pointin dollar sales volume?
The Gigadigit Manufacturing Inc. is considering to produce a new product. The following data have been provided to management: Sales price S17.50/unit Equipment cost S250,000 Incremental overhead cost |550,000/year Sales and marketing cost $150,000/year Operating and maintenance cost $25/operating hour Production time/1,000 units 100 hours Packaging and shipping cost s0.50/unit Planning horizon Minimum attractive rate of return 15% 5 years The managers would like to know the viability of this product and how it would roll out in sales. (a) To give them basis and insight what is the break-even value of units that must be sold annually to keep the product viable? (b) If the target revenue is from 30,000 units sold, what is the expected profit? (C) If the profit drops by 13% due to equipment replacement, how much must have been the cost of the alternative equipment? (d) Provide graph for (a)
Solve, a. Compare the probable part cost from Machine A and Machine B, assuming that each will make the part to the same specification. Which machine yields the lowest part cost? Assume that the MARR = 10% per year. b. If the cost of labor can be cut in half by using part-time employees, which machine should be recommended?
Quèstion 12 A company has an export transaction with the payment term D/P T/R at 15 days after sight. Assuming the documents mailing period is 7 days, and the date of collection is July 1st (without considering the reasonable working hours of the bank). The date of payment is O July 1st July 8th O July 15th O July 22nd
Kaneb is evaluating two alternative pipeline welders. Welder A costs $310,000, has a /-year life, and is expected to generate net cash inflows of $78,000 in each of the 7 years. Welder B costs $320,000, has a 5-year life, and is expected to generate annual net cash inflows of $68,900 in each of the 5 years. Kaneb's cost of capital is 16%. Using the equivalent annual annuity method, which alternative should be chosen and what is its NPV?
The projected profit of a hi-tech recording disks retailer is Birr 200,000 for the current year based on sale volume of 200,000 units. The company has been selling the disks for $16 each; variable costs consist of the Birr 10 purchase price and Birr 2 handling cost. The retailer’s annual costs are Birr 600,000. Required: a. Calculate the breakeven point for the current year in units. b. What will be the company’s profit for the current year if there is a 10% increase in projected unit sales volume? c. Management is planning for the coming year when it expects that the unit purchase price of the disks will increase by 30%. What volume of dollar sales must the retailer achieve in the coming year to maintain the current year’s profit if the selling price remains constant at Birr 16
Smith Equipment has three separate shipments to customers all in the same city. The shipment welights are 20,000 Ibs. 25,000 bs, and 10,000 ibs. Smith Equipment's carrier charges $14 per hundredwelght (cwt) if each shipment is sent separately. If the three shipments are consolidated at Smith Equipment's warehouse and sent in a single truck, the carrier charges $11 per cwt with a $500 consolldated dellvery fee per destination added. Assume the carrler promises one-day delivery on the separate shipments, and two-day dellvery on the consoldated shipment. If shorter delivery time is important to these customers, Smith Equipment should Multiple Choice O consolidate the shipments because the savings is substantial O consolidate the shipments even though the savings are minimal send the shipments separately even though this is asightly more expensive option send the shipments separately even though this is a significantly more expensive option
Q1. Calculate EOQ and plot a graph with the following information. Annual Usage= 1600 units Holding Cost $8 unit/yr Ordering Cost = $100 unit/yr > Price of per Unit= $50 Number of Units 1600 800 400 200 100 80 50 Number of Order 1 2 4 8 16 20 32
9. A machine part can be exhausted either from aluminum or steel. There is an order of 8,000 units.Steel costs 3.80Php/kg, while aluminum cost 8.70Php/kg. If steel is used, the steel per unit weighs110g and 30g for aluminum. In production, steel is 50 units/hr and 80units/hr with an aid of a toolcosting 640Php, which will be useless after the 8,000 units are finished. The cost of the machineoperator is 10.80Php/hr. if all other costs are identical, which material is more economical?
2.7 A machine cost $315000 to purchase . Fuel , oil, grease and minor maintenance are estimated to cost $53.50 per operating hours. A set of tires cost $16000 to replace and their estimated life is 3100 user hours. A $ 17000 major repair will probably be required after 6200 hr of use. The machine is expected to lat for 9300 hr. after which it will be sold at a price (salvage value ) equal to 13% of the original prurchae price . A final the owner of the machine charger per hours of use, if it is expected that the machine will operated 3100 per year ? the compnay's cost -of -capital rate is 7.25%.
An electronics firm is planning to manufacture a new handheld gaming device for the preteen market. The data have been estimated for the product. Assuming a negligible market (salvage) value for the equipment at the end of five years, determine the breakeven annual sales volume for this product.
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