1. A firm has estimated that the fixed costs of operations for a new product at $4.5M per year. Variable costs will depend on the volume of production, and has been quantified at $250 per unit. If the firm plans to sell the product for $1000. What volume of sales is needed for this product to break-even?
Q: e present value annuity factor
A: An annuity factor is a process of determining the amount which can be withdrawn initially from the…
Q: Consider a call option on Stock X. The call expires in 7 months and has a strike price X=$22. The…
A: A call option is an option in which the buyer has the choice but not the obligation to buy the…
Q: Use the following to answer questions 11 – 15 AL issues 4.0%, 20-year bonds with a face amount of…
A: As per Bartleby guidelines,If a question with multiple sub-parts are posted, first 3 sub-parts will…
Q: 3. As part of your future retirement planning, you purchase an annuity that pays 3.5 % Search…
A: The retirement planning involves making regular payments or accumulation of funds that will be used…
Q: recommended actions on how to address: Execution risk Strategic risk Reputation risk Process…
A: Financial risk refers to a variety of risks related with funding, such as financial transactions…
Q: D3) The spot rate of Kenya shillings to Euros was 132kes = 1 euro. The forward rate was Ke, 131 = 1…
A: Exchange rate changes with time and interest rate in the market and there may be loss or gain on…
Q: Mel complains about a shabby t-shirt that was delivered to him by an online trader upon his…
A: The act of purchasing and selling financial products over the Internet is known as online trading.…
Q: A B 1 Particulars Values 2 Future Value (FV) 3 Interest rate Compounded monthly (I/Y) |0.05 4…
A: When interest is compounded monthly, the interest rate per annum shall be divided by 12 to calculate…
Q: Year Net Cash Flow Alt 1 Net Cash Flow Ali PhP 11,000 - PhP 5000 5,000 2,000 4,000 3,000 3 3,000…
A: Capitalized cost is present value of all cost and benefits that are worth today considering interest…
Q: How much should be invested now at 6.7% compounded semiannually to have $47,000 in 19 years?
A: The amount required to be invested today is calculated as present value
Q: Let's say you showed your friend Cardi all these calculations, and she went, "Man, this is screwed…
A: She can do: a. Ask her credit card company to shorten the duration of the loan. b. Make her…
Q: Calculate the reduced paid-up insurance for Lee Chin, age 41, who purchased a $310,000 20-year…
A: An endowment policy is essentially a life insurance policy that, in addition to insuring the…
Q: Soy sauce company ABC has operating profits of Rp. 100 million, taxes of Rp. 17 million, interest…
A: Given: Operating profits of Rp. 100 million, Taxes of Rp. 17 million, Interest expense of Rp. 34…
Q: Exercise 2: 1. An investment amounting to P300,000 has an annual interest of 4%. How much discount…
A: Simple interest is the interest without compounding that simple plain interest is calculated over…
Q: The current level of the SPX stock index is 4,475. You expect that the index will experience a…
A: SPX - SPX options are European style option meaning it can be exercised only on the expiration date.…
Q: What is the expected return of a portfolio that has $8,000 invested in S and $2,000 invested in T?…
A: Return of Stock S = (0.25 * 30%) + ( 0.5 * 15% )+ (0.25 * -10%) = 7.5 + 7.5 - 2.5 = 12.5 Return of…
Q: Consider two riskless perpetuities: (i) pays $120 every year; (ii) pays $10 every month. If the…
A: The term "perpetuity" refers to an endless stream of financial flows. Money's value depreciates over…
Q: A promissory note has a face value of 22275.00 and it has a date of issue of November 15 this year.…
A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a…
Q: MTE mechanical engineering Company has a machine purchased 5 years ago at a cost of BDT 100000.00.…
A: Data given: Old Machine: Cost price = BDT 100000 Life of machine =10 years Annual depreciation = BDT…
Q: ) Gabrielle needs $200,000 in eight years. She has set up a sinking fund that earns 5% compounded…
A: Future Value is $200,000 Time period is 8 years Interest rate compounded monthly is 5% To Find:…
Q: Zuti has a capital investment project that could start immediately. The project will require a…
A: The present value (PV) of a future sum of money or stream of cash flows given a specified rate of…
Q: Clark and Lana take a 30-year home mortgage of $122,000 at 7.4%, compounded monthly. They make their…
A: Loans are to be paid by the monthly payment that carry the payment for interest and also payment of…
Q: Consider the model of Black and Scholes. Consider the cash=or-nothing put option V (T) = 1{S(T)<= K}…
A: Premiums are the result of adding the intrinsic and time value of an option. The difference between…
Q: To raise $5,000,000 to expand into new markets, a very successful laptop manufacturing company…
A: Given: Face Value FV: $5000000 Annual coupon rate = 7% Periodic/Semi-annual coupon = 5000000*7%/2 =…
Q: Calculate the YTM for the below Bonds using the Interpolation Method:
A: Yield to maturity refers to the total return generated by a bond until it matures. Yield to maturity…
Q: 17. Bond X and Bond Y are both issued by the same company. Each of the bonds has a face value of…
A: You have specifically asked to answer question 17 ,18 and 19. Since multiple questions are asked ,…
Q: At the end of 2021, PT. Wardah International announced a gross profit of $1 million. The costs…
A: earnings available for common stockholders = Net income - preferred Dividend
Q: For a consumer, utility maximization occurs at O the intersection of two budget lines O the…
A: A consumer tend to choos such combination of goods where the utility derived from such goods is…
Q: You have $10,000 to invest for 90 days. Current spot rate: $1.32/₤. The 90-day forward rate is…
A: No arbitrage forward rate is that rate which is lie and agree with interest rate prevailing in the…
Q: Which type of bond is likely to pay a coupon payment that is varying (i.e. it changes over time) ? O…
A: STRIPS means Separate Trading of registered interest and principal securities. These are debt…
Q: It is 2024 and Carpet Baggers Inc. is proposing to construct a new bagging plant in a country in…
A: Germany Spot Exchange Rate($/Euro) 1.4 US Exchange rate 10% Euro Exchange Rate 5%…
Q: The financial manager of Federal Financial leasing & investment Ltd has well-structured capital. The…
A: Given, Debenture cost is 8% Preferred stock cost is 12%
Q: Evaluate the required value based BD50,C O A. BD 29,932.90 O B. BD 28,962.90 O C. BD 27,841.87
A: The present value is the value of money that is equivalent to the future money considering the…
Q: Briefly define each of the five key financial assets. Is every financial asset also a financial…
A: Financial assets is defined as the liquid asset, which gets their value from the contractual right…
Q: The quote in Tokyo Exchange market for OMR is given as JPY 275.639 = 1 OMR as bid and JPY 275.763 =…
A: Exchange Rate in Tokyo Exchange Rate is as follows: Bid Rate is JPY 275.639 =1 OMR Ask Rate is JPY…
Q: What can be done by a business to mitigate: Execution risk Technology risk Reputation risk…
A: Risk management Risk management is the identification, evaluation, and prioritization of risks…
Q: I Suppose Hillard Manufacturing sold an issue of bonds with a 10-year naturity, a $1,000 par value,…
A: A bond's value is the present value of all the future cash flows from the bond. To calculate the…
Q: w/ ル 16 AaBbCcDc AaBbCcDc AABBCC AABBCCC A 1 Normal 1 No Spac... Heading 1 Heading 2 , 三 Paragraph…
A: Ratios are given as follows for 2 years: 2018 2017 Current Ratio 4.26470 4.82510 Acid test…
Q: How much did he have after the 10 years?
A: Principal amount deposited = $1000 Simple rate of interest = 10% p.a. Time period = 7 years Simple…
Q: Project C costs $8,000 and will generate net cash inflows of $3,250 before taxes for 5 years. The…
A: NPV is the difference between present value all cash inflows and initial investment. NPV=PV of cash…
Q: You borrow money on a self liquidating installment loan (equal payments at the end of each year,…
A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: A state lotto has a prize that pays $500 each week for 35 years. Find the total value of the prize:…
A: a. Total Value of Prize=$500×35×52Total Value of Prize=$910000
Q: A $2,400 payment is due 6 months from today. What is the equivalent value of the $2,400 payment if…
A: The more is the compounding more is the effective interest rate and more is the interest accumulated…
Q: (a) Although the sharing of business profit by a person is prima facie evidence of partnership, yet…
A: Partnership is defined as the formal arrangement through the two or more parties with the purpose to…
Q: The Adeeva's gross monthly income is $4200. They have 18 remaining payments of $370 on a new car.…
A: a) Gross Monthly income 4200 Tax And Insurace on House 370 adjusted Monthly Income 3830…
Q: How much must you deposit each year into your retirement account starting now and continuing through…
A: The current value of a forthcoming sum of money or series of payments with a predetermined rate of…
Q: TRADE NUMBER RANDOM PRICE CHANGE STOCK PRICE NUMBER 1 45 +3/8 +1/8 +1/8 +1/2 2 95 3 72 4 69 99 53 7…
A: Trade number Random Number Price change 1 45 0 2 95 0.375 3 72 0.125 4 69 0.125 5 99 0.5…
Q: Anna is buying a house selling for $265,000. To obtain the mortgage, Anna is required to make a 10%…
A: Data given:: Selling price of house = $265,000 Down payment = 10% N= 30 years Interest rate =5%…
Q: Aloha, Inc., has 5.5 percent coupon bonds on the market that have 10 years left to maturity. If the…
A:
Q: uppose that you purchase a bond from a company that promises to pay $52.66 in coupon payments for…
A: The total amount that a bond pays over its lifetime includes: = Maturity Amount + Coupon Payments
please answer question 1 with details on how to do it. Thank you.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $18,250 per year. The information they will use to consider these changes is shown here.Shonda & Shonda is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1.200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are as follows: A. What will be the impact on the break-even point if Shonda & Shonda purchases the new computer? B. What will be the impact on net operating income if Shonda & Shonda purchases the new computer? C. What would be your recommendation to Shonda & Shonda regarding this purchase?A mini-mart needs a new freezer and the initial Investment will cost $300,000. Incremental revenues, including cost savings, are $200,000, and incremental expenses, including depreciation, are $125,000. There is no salvage value. What is the accounting rate of return (ARR)?
- Modern Artifacts can produce keepsakes that will be sold for $76 each. Non-depreciated fixed costs are $940 per year and variable costs are $48 per unit. a. If the project requires an initial investment of $2,940 and is expected to last for 8 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 8 years to a final value of zero, and the discount rate is 14%. (Round your answers to the nearest whole dollar.) NPV break-even sales level is ?Modern Artifacts can produce keepsakes that will be sold for $70 each. Non-depreciated fixed costs are $1,050 per year and variable costs are $58 per unit. a. If the project requires an initial investment of $2,940 and is expected to last for 8 years and the firm pays no taxes, what are the accounting and NPV break-even levels of sales? The initial investment will be depreciated straight-line over 8 years to a final value of zero, and the discount rate is 9%. (Round your answers to the nearest whole dollar.) Accounting break-even sales level NPV break-even sales level $ b. How do your answers change if the firm's tax rate is 40%? (Round your answers to the nearest whole dollar.) Accounting break-even sales level NPV break-even sales level $Direction: Solve the following problems completely. For problem 1 and 2, please refer to the given situations. A company plans to manufacture a product and sell it for $3.00 per unit. Equipment to manufacture the product will cost $250,000 and will have a net salvage value of $12,000 at the end of its estimated economic life of 15 years. The equipment can manufacture up to 2,000,000 units per year. Direct labor costs are $0.25 per unit, direct material costs are $0.85 per unit, variable administrative and selling expenses are $0.25 per unit, and fixed overhead costs are $200,000, not including depreciation. Direction: Solve the following problems completely. Problem 1. If capital investments and return on the investment are excluded, what is the number of units that the company must manufacture and sell in order to break even with all other costs? Problem 2. If straight-line depreciation is used, what is the number of units that the company must manufacture and sell to yield a…
- An engineer of a manufacturing company has determined the costs of producing a new product to be as follows: Equipment cost: $300,000/year Variable cost per unit of production: $15.00 Overhead cost: $50,000/year The company is planning to run this project for 5 years and estimated that the product can be sold for a unit price of $40. How many units must be produced and sold each year to break even? [Hints: no interest is given, so no consideration of time value of money. Use the knowledge you learnt in chapter 2]1.A manager has determined that a potential new product can be sold at a price of 10.00 each. The cost to produce the product is 5.00, but the equipment necessary for production must be leased for 25,000 per year. What is the break-even point? 2.In order to produce a new product, a firm must lease equipment at a cost of 100,000 per year. The managers feel that they can sell 50,000 units per year at a price of 75. What is the highest variable cost that will allow the firm to at least break even on this project? Variable CostASAP
- Kabalikat Company has the opportunity to introduce a new product. Kabalikat expects the product to sell for P75 with variable cost per unit of P50. The annual fixed costs, excluding the amount of depreciation is P4,500,000. The company expects to sell 300,000 units. To produce the new product line, the company needs to purchase a new machine that costs P6,000,000. The new machine is expected to last for four years with a very negligible salvage value. The company has a policy of depreciating its machine for both book and tax purposes for four years. The company has a marginal cost of capital of 13.75 percent and is subject to tax rate of 40 percent. The machine’s net present value is: Group of answer choices P928,500 P2,786,100 P150,270 P1,028,900 PreviousNext1. A manager has determined that a potential new product can be sold at a price of $25 each. The cost to produce the product is $17.5, but the equipment necessary for production must be leased for $75,000 per year. What is the break-even point? 2. In order to produce a new product, a firm must lease equipment at a cost of $175,000 per year. The managers feel that they can sell 65,000 units per year at a price of $90. What is the highest variable cost that will allow the firm to at least break even on this project? (Round your answer to 2 decimal places.)NEED ASAP !!!! WITH EXPLANATION Santos Company needs a new cutting machine. The company is considering two machines: machine X and machine Y. Machine A costs$18,000, has a useful life of ten years, and will reduce operating costs by $7,000 per year. Machine B costs only $12,500, will also reduceoperating costs by $3,500 per year, but has a useful life of only five years.The payback period formula is = Investment required / Annual Net Cash Inflow Which machine should be purchased according to the payback method? a)Machine Xb) none of the abovec) Machine Yd) Both have the same payback period