Winnebagel Corporation currently sells 20,000 motor homes per year at $103,000 eachand 14,000 luxury motor coaches per year at $155,000 each. The company wants tointroduce a new portable camper to fill out its product line; it hopes to sell 25,000 ofthese campers per year at $19,000 each. An independent consultant has determinedthat if the company introduces the new campers, it should boost the sales of its existingmotor homes by 2,700 units per year and reduce the sales of its motor coaches by 1,300units per year. What is the amount to use as the annual sales figure when evaluating thisproject? (Do not round intermediate calculations and enter your answer in dollars, notmillions of dollars, e.g., 1,234,567.)Annual sales

Sales revenue is one of important element of income statement. Sales revenue is product of sales…

Answered: Winnebagel Corporation currently sells…

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

See similar textbooks

Similar questions

The Fleming Company, a food distributor, is considering replacing a filling line at its Oklahoma City warehouse. The existing line was purchased several years ago for $3,600,000. The line’s book value is $445,000, and Fleming's management feels it could be sold at this time for $350,000. A new, increased capacity line can be purchased for $2,575,000 and will require and increase in NWC of $55,000. Delivery and installation of the new line are expected to cost $50,000 and 215,000 respectively. Assuming Fleming’s marginal tax rate is 35%, calculate the net investment for the new line.
Please answer fast i give upvote.
ACI Group is evaluating the proposal of a new RMG factory called ACI Exclusive Fabrics. Theproject will have a life cycle of six years. The Group has forecasted a strong sales growth in RMGbusiness and therefore, wants to evaluate a new project plan. ACI Group is renting a premise of50,000 Square feet in Savar and ACI Exclusive Fabrics is planning to use 10,000 Square feet fromthis facility. The rest of the premise is currently being used by another RMG factory of ACIGroup called ACI Fabrics. The ACI Fabrics has already started its production. Using the newmachine, ACI Fabrics is selling 50,000 cloth per year at $4 per cloth. Total capital cost for ACIExclusive Fabrics is USD 80,000 and is depreciated using the straight-line method over six yearsto a zero-salvage value. The cash flow from asset for ACI Exclusive Fabrics is USD 35000 in thefirst year, followed by USD 30000 in the second year and USD 25000 in the third year. Theannual total rent of 50,000 Square feet premise is USD…
A.
Whispering Winds Corporation is considering purchasing a new delivery truck. The truck has many advantages over the company's current truck (not the least of which is that it runs). The new truck would cost $56,525. Because of the increased capacity, reduced maintenance costs, and increased fuel economy, the new truck is expected to generate cost savings of $8,500. At the end of eight years, the company will sell the truck for an estimated $27,600. Traditionally, the company has used a general rule that it should not accept a proposal unless it has a payback period that is less than 50% of the asset's estimated useful life. William Davis, a new manager, has suggested that the company should not rely only on the payback approach but should also use the net present value method when evaluating new projects. The company's cost of capital is 8%. (a) Calculate the cash payback period and net present value of the proposed investment. (If the net present value is negative, use either a…
Winnebagel pic currently sells 30,000 mobile caravans per year at E52,000 each and 12,000 luxury stationary caravans per year at £91,000 each. The company wants to introduce a new caravanette to fill out its product line; it hopes to sell 19,000 of these caravanettes per year at £13,000 each. An independent consultant has determined that if Winnebagel introduces the new caravanettes, it should boost the sales of its existing luxury stationary caravans by 4,500 units per year, and reduce the sales of its mobile caravans by 850 units per year. What is the amount to use as the annua sales figure when evaluating this project a) © £409,500,000 b) £44.200,000 E247.000,000 None e) £612,300,000.
Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $2.77 million. Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $45,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates: • Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.05 million per year in additional sales, which will continue for the 10-year life of the machine. • Operations: The disruption caused by the installation will decrease sales by $5.09 million this year. As with Billingham's existing products, the cost of goods for the products produced by the XC-750 is expected to be 72% of their sale price. The increased production will also require increased inventory on hand of $1.11 million during the life of the project, including year 0. • Human Resources: The…
The sales and finance team of a car company is evaluating a new proposed luxury model of its brand that will require an investment of $1Billion in a new machine for car interior decoration. Demand for the company’s car is expected to begin at 100,000 units in year 1, with 10% annualgrowth thereafter. Production cost will be $40,000 per unit in the first year, and increase by a rate of either 3% or 5% per year as a result of wage increase. Selling price will start at $35,000 and increase by 5% of the production cost. The model will be phased out at the end of year 10. Inaddition, 0.3%, 2% and 1% of before tax profit per year will be spent on social corporate responsibility, commercial (including promotions) and recalls respectively. Assume taxes will be 30% of yearly profit and that inflation will remain at 0% per year throughout the 10 year ofproduction. Also assume interest rate is expected to be 3% per year in the first 5 years and 5% in the last 5 years.a. Based on present worth…
Apothic Inc. is nestled in the beautiful wine country of British Columbia. It is considering the purchase of ten hydraulic ice win press machines for a total price of $350,000. The firm's old press machines have a book value of $85,000, but can only be sold for $63,000. The new hydraulic press machines are estimated to attract additional customers and will generate annual revenue of $62,000 for the first 6 years and decreasing to 58,000 for the next 4 years. Annual operating expenses will be 21% of the revenue. Working capital of 30,000 will have to be injected at the start of operation to support the increased sales. At the end of year 6, a capital upgrade will cost $15,000. At the end of year 10, the press machines can be salvaged for $52,500. Apothic Inc. is in the 40% tax bracket and has 12% cost of capital. The capital cost allowance of the machines is 30%.Questions:What is the present value of salvage of new machine?What is the present value of upgrade?What is the present value…
Gonzalez Corporation manufactures a children's bicycle, model CT8. Gonzalez currently manufactures the bicycle frame. During 2023, Gonzalez made 30,000 frames at a total cost of $750,000. Ryan Corporation has offered to supply as many frames as Gonzalez wants at a cost of $23.50 per frame. Gonzalez anticipates needing 33,000 frames each year for the next few years. Required Requirement 1. (a) What is the average cost of manufacturing a bicycle frame in 2023? How does it compare to Ryan's offer? The average cost of $ per frame is than Ryan's offer. (b) Can Gonzalez use the answer in requirement 1a to determine the cost of manufacturing 33,000 bicycle frames? Explain. Gonzalez take the average manufacturing cost in 2023 to determine the total cost of manufacturing 33,000 bicycle frames. The reason is that Requirement 2. Gonzalez's cost analyst uses annual data from past years to estimate the following regression equation with total manufacturing costs of the bicycle frame as the…

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS