With a net unit price of $5 per armrest, how many armrests must A-Design sell to break-even with respect to the investment?
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With a $100,000 investment in a new injection moulding
machine, A-Design Inc., a company specialized in the
design and manufacturing of armrests for wheelchairs
was able to achieve an operating income of $36,000 in
its first year of production/operation. The interest
expenses on the money A-Design has borrowed were
$5,000 per year.
4. With a net unit price of $5 per armrest, how many armrests
must A-Design sell to break-even with respect to the
investment?
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- With a $100,000 investment in a new injection mouldingmachine, A-Design Inc., a company specialized in thedesign and manufacturing of armrests for wheelchairswas able to achieve an operating income of $36,000 inits first year of production/operation. The interestexpenses on the money A-Design has borrowed were$5,000 per year. 5. Perform a sensitivity analysis on the net profit of A-DesignInc. for an income tax rate of 20% and 30%In order to build a new warehouse facility, the regional distributor for Valco Multi-position Valves borrowed $1.6 million at 10% per year interest. If the company repaid the loan in a lump sum amount after two years, what was (a) the amount of the payment, and (b) the amount of interest?K&J Enterprise lnc. has purchased a small motor engine line to go in golf cart. The total purchase cost was $1.5 million, which can generate revenues of $650.000 per year. Direct manufacturing costs are expected to run $220.000 a year and other fixed cost expenditures would be somewhere near $80.000 a year. The O&M cost would be around $45,000 a year, and K&J expects to pay various taxes including income taxes of $58,000. The project would last about 10 years and at that time, the business could be sold for $1 million. Determine the project cash flows over a 10-year period.
- A Cookie Company has negotiated to introduce a new cookie for 6 years. The cookie would be purchased in boxes from amanufacturer for $100 per box and sold to supermarkets for $200 per box. Annual sales is expected to be 5 000 boxes. Theestimated annual cash expenses to sell the new product would be $180,000. The cost of the equipment to package thecookies is $300 000, and the working capital needed is $400 000. After 5 years, the equipment will need to be repaired and maintained at a cost of $25 000. After 6 years, the residual valueof equipment will be $50 000. The working capital would be released at the end of 6-year period. The rate of discount ofthe company is 16%. 1. Compute net present value (NPV) of the new product. Do not compute income tax. 2. Would you recommend the company proceed with this new venture?A Cookie Company has negotiated to introduce a new cookie for 6 years. The cookie would be purchased in boxes from amanufacturer for $100 per box and sold to supermarkets for $200 per box. Annual sales is expected to be 5 000 boxes. Theestimated annual cash expenses to sell the new product would be $180,000. The cost of the equipment to package thecookies is $300 000, and the working capital needed is $400 000.After 5 years, the equipment will need to be repaired and maintained at a cost of $25 000. After 6 years, the residual valueof equipment will be $50 000. The working capital would be released at the end of 6-year period. The rate of discount ofthe company is 16%.Required:1. Compute net present value (NPV) of the new product. Do not compute income tax2. Would you recommend the company proceed with this new venture?Required information. In order to build a new warehouse facility, the regional distributor for Amazon borrowed $2 million at 13% per year interest. If the company repaid the loan in a lump sum amount after 2 years, what was the amount of the payment? (You must provide an answer before moving to the next part.) The amount of the payment was $ 6,590,796.72
- Junker Rental Car has a contract with a garage for major repair service for $450 per car, every 6 months. Management estimates that for $350,000, the company could have its own facility, financed at 8% interest for 20 years, and a salvage value of $20,000. They will do their own car repairs at a cost of $200 per car, every 6 months. Ignoring taxes and other economic factors, what is the minimum number of cars needed to make the change feasible?Camber Corporation has to decide if they can finance purchasing 10 new machines for all their manufacturing sites. The machines cost $1.73 million each, and the supplier agreed to the following payment terms, 40% upfront, and the remainder to be paid over 4 years at an annual rate of 12%.b) Critically discuss the effect of increasing the amount paid upfront when corporations make capital purchases, focusing on the benefits and drawbacks1.-DO IT IN EXCEL, AND SHOW THE FORMULAS If the company purchases factory equipment, its $719,000 cost will be financed with a five-year 18.4% interest loan that requires equal annual payments including principal and interest. The bank charges a 0.75% commission. The equipment will be depreciated with a useful life of 5 years. The company will pay $12,000 per year for maintenance services. The company plans to keep the machine even after its recovery period.What is the total amount paid to the bank? A) 1'160,034.00 B) None of the above C) 719,000.00 D) $938,672.81 (Choose one option)
- Felton Co. produces rubber bands for commercial and home use. Felton reported $1 million residualincome (RI) with $20 million net book value (NBV) of assets and $5 million in operating income forthe year. What was the required rate of return?Tool Makers, Inc. uses tool and die machines to produce equipment for other firms. The initial cost of one customized tool and die machine is $850,000. This machine costs $10,000 a year to operate. Each machine has a life of 3 years before it is replaced. What is the equivalent annual cost of this machine if the required return is 9%? (Round your answer to whole dollars.)DSSS CorporationDSSS Corporation is considering a new project to manufacture widgets. The cost of the manufacturing equipment is $135,000. The cost of shipping and installation is an additional $2,600. The asset will fall into the 3-year MACRS class. The year 1- 4 MACRS percentages are 33.33%, 44.45%, 14.81%, and 7.41%, respectively. Sales are expected to be $215,000 per year. Cost of goods sold will be 64% of sales. The project will require an increase in net working capital of $2,600. At the end of three years, DSSS plans on ending the project and selling the manufacturing equipment for $30,000. The marginal tax rate is 36% and DSSS Corporation’s appropriate discount rate is 12%. The fixed expenses is $12,000.Refer to DSSS Corporation. What is the book value of the machine at the end of year 4? Group of answer choices $20,379 $45,862 $10,196 $61,163
