A project has estimated sales of 14,500 units, ±3 percent. The expected variable cost per unit is $12, and the expected fixed costs are $44,000. The fixed and variable cost estimates are considered accurate within a range of 15 percent. The sales price is estimated at $27 a unit, ±1 percent. What is the contribution margin for a sensitivity analysis if the fixed cost is $30,000? Multiple Choice O $13 $14 $15 $16
Q: After graduation, you plan to work for Dynamo Corporation for 12 years and then start your own…
A: Deposit Amount for 1 to 6 years = $42000Deposit Amount For 7 to 12 year = $15000Gift Amount in year…
Q: The enterprise sells products for 52 million per year. Production takes place evenly over 5 working…
A: Operating Cycle is the period which starts from the day where money is going out and ends when the…
Q: Jenny bought a share of Athrax Company for $65 one year ago. The stock paid a dividend of $2.52 per…
A: Quarterly Dividend = $2.52Growth rate = g = 3%Selling Price of Stock = s = $87.10
Q: The financial manager has determined the following schedules for the cost of funds: Cost of Debt…
A: Optimal capital structure is the combination of equity and debts wherein the overall cost of capital…
Q: For the given student loan, find the interest that accrues in a 30-day month, then find the total…
A: To find the interest that accrues in a 30-day month on a student loan of $8800 at 6.3% interest, we…
Q: (a) If interest is compounded monthly, how many times would the growth factor be applied in 3 years?
A: Given equation of the Form , provides an example of interest compounded annually. This means that…
Q: Loan term in years Monthly Payment on $178,000 loan (in $) Total amount paid back over the…
A: Please note under answering guidelines only up to 3 subparts can be answered. The table is completed…
Q: Which of the following statements regarding the graph of the SML is most accurate? A Select one O…
A: Security market line or SML represents a relationship between expected return and market risk. A…
Q: The real risk-free rate is 2.35%. Inflation is expected to be 3.35% this year, 4.75% next year, and…
A: To calculate the yield on a 7-year Treasury note, we need to consider the components involved: the…
Q: (Interest Rate risk) Bond S has 4 years to maturity. Bond T has 30 years to maturity. Both have 9%…
A: A bond is a kind of debt security issued by the government and private companies for raising funds…
Q: QUESTION THREE Imagine that Hazim Islamic bank, has the following asset and financial details:…
A: Tier 1 CapitalPaid-up ordinary shares = RM 30 millionShare premium= RM 5 millionRetained Profits =…
Q: persnal Finance Problem A retirement home at Deer Trail Estates now costs $137,000 Inflation is…
A: Annuity is a series of equal periodic payments at equal interval over the specified period.With…
Q: 5. Read the case and answer questions based on the Cost of Capital (CC) method. Bain Capital is…
A: Given Levered beta is 2.4; Debt-equity Ratio is 0.3; and the Tax rate is 40%.
Q: The Drogon Company just issued a dividend of $2.81 per share on its common stock. The company is…
A: Dividend = D0 = $2.81growth rate = g = 5%Price = P0 = $50Since growth rate is expected to be 5%,…
Q: Can you please assist by clearly answering the question. Please dont copy and paste answers that…
A: The capital structure consists of different component of capital that include the equity and dead…
Q: Which is a true statement Bond holders have the most to lose and most to gain Bond cash flows are…
A: The bond holders are the one who invest in the bond and there is fix rate which said to be coupon…
Q: You currently own 600 shares of JKL, Inc. JKL is an all-equity firm that has 75,000 shares of stock…
A: Total number of shares owned=600All equity firm has a number of shares=75,000Earnings before…
Q: Assume a $200,000 investment and the following cash flows for two products: Year Product X Product Y…
A: Payback period= Years before break-even + Unrecovered amount/ Cash flow in recovery year
Q: At the end of every 6 months, Tomas deposits $20,000 into a savings account, which pays an annual…
A: Compound = Semiannual = 2Saving Deposits = d = $20,000Interest rate = r = 12.3 / 2 = 6.15%Time = t =…
Q: The manager for a growing firm is considering the launch of a new product. If the product goes…
A: Net present value refers to the method of capital budgeting that is helpful in estimating the…
Q: Show how trademark ownership and free speech collide. How can these assertions be reconciled?
A: Introduction:Trademark is a recognizable symbol that specifies a particular product of a company and…
Q: After graduation, you plan to work for Dynamo Corporation for 12 years and then start your own…
A: To solve this question, we will use the concept of time value of money.The basic requirement is to…
Q: How should the capital structure weights used to calculate the WACC be determined?
A: WACC stands for weighted average cost of capital.WACC is the blended cost of capital which takes…
Q: Based on the following cash flow graphs, determine whether each of the companies shown would be…
A: A company's life cycle is divided into primarily four stages that it experiences in its life. These…
Q: raig also is beginning to think about his retirement. He let you know that he would like to retire…
A: Future value refers to an amount generated from the amount of investment made today affected by…
Q: (Interest Rate risk) Bond S has 4 years to maturity. Bond T has 30 years to maturity. Both have 9%…
A: A bond is a kind of debt security issued by the government and private companies for raising funds…
Q: Q3. If EBIT in Year 1 is 6.5M (instead of 11.5M, in the attached screenshot), but all other…
A: The Leveraged buyout:The leveraged buyout occurs when a company acquires another company with…
Q: that GS are the champions this season is 60%. What is the standard deviation of the portfolio…
A: First, we are going to list the expected return of each stock given the probability. The probability…
Q: If the project is financed using 100% equity capital, then Green Rabbit Transportation Inc.’s return…
A: We can determine the firm's earnings using the formula below:We can determine ROE and EPS using the…
Q: gamble that pays either $0 or $100,000 each with a 50% chance? What does your answer imply about…
A: If there are two values with their chances, then the expected value is calculated as shown below.
Q: Kelly Enterprises stock currently sells for $35.25 per share. The dividend is projected to increase…
A: Stock price refers to the price at which the shares are being buying and selling by the investors or…
Q: Austin Grocers recently reported the following 2016 income statement (in millions of dollars): Sales…
A: It is a case where net income and dividend growth rate are projected for the year 2017. It is based…
Q: Charlene is evaluating a capital budgeting project that should last for 4 years. The project…
A: Deprecation is that amount which is charges in every year on assets due to used of assets after put…
Q: Suppose a stock had an initial price of $80 per share, paid a dividend of $.60 per share during the…
A: To calculate the dividend yield and capital gains yield, we need to use the following…
Q: 1 Formula: Multiply, Subtract; Absolute Cell Referencing 2 3 Using Excel to Create an Installment…
A: Amortization of a mortgage refers to the process of paying off a mortgage over a specified period of…
Q: Suppose you are a British venture capitalist holding a major stake in an e-commerce start-up in…
A: The expected value of the spot rate will be the sum of the boom probability and the exchange rate in…
Q: ani Corporation has 5 million shares of common stock outstanding. The current share price is $65,…
A: Weighted average cost of capital is the weighted average cost of after tax cost of debt and weighted…
Q: a. Find the net cash provided by or used in investing activities. b. Find the net cash…
A: a) To find the net cash provided by or used in investing activities, we need to identify the cash…
Q: If a small business fails to repay a bank loan, what will the lending institution do to recover its…
A: It is a case where the business is unable to repay its loan and the lending institution is…
Q: Can you please assist me and not just copy and give me answers that have already been answered. a)…
A: As per the Honor code of Bartleby we are bound to give the answer of first question only, please…
Q: (Present value of an annuity due) Determine the present value of an annuity due of $2,000 per year…
A: Present value of annuity due= Pmt*((1-(1+r)^-n)/r) *(1+r)
Q: Find the value of the improper integral. The Integral Diverges 3/4 3/2 dx 12 h
A: An improper integral is said to be definite if their exists a limit and the solution is a finite…
Q: This problem is useful for testing the ability of financial calculators or excel. Consider the…
A: IRR stands for Internal Rate of Return, which is a financial metric used to calculate the potential…
Q: You have 6,000 USD in your brokerage account. You decide to short 100 shares of Apple stock AAPL…
A: The stock price is determined by various factors such as supply and demand dynamics, investor…
Q: Yvette took out a term loan with an annual interest rate of 4.61% to pay for a car. The beginning…
A: Opening Balance of Loan = $6,596.82Closing Balance of Loan = $6,143.11Interest rate = 4.61% per…
Q: Use the following data to answer the question regarding the performance of Guardian Stock Fund and…
A: The information ratio considers both returns and risk, providing a more comprehensive measure of…
Q: rminants of interest rates for individuals securities you are considering an investment in 30 years…
A: Due to inflation that is increase in prices the actual rate of return is much less rather than…
Q: 10. You must choose one of the 2 project proposals below. Interest rates are 10%. Which of t the…
A: With future value, annual interest rate (r) and annual period (n), the periodic payment or annuity…
Q: (Related to Checkpoint 6.1) (Future value of an annuity) Imagine that Homer Simpson actually…
A: The future value represents the expected worth of the current amount and is estimated by compounding…
Q: i want to know the value in 8 years of $100,000 deposited in an account. the amount is earning 12%…
A: Data given:PV=$100,000N=8 yearsRate=12% (compounded monthly)Required: FV
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
- Plentiful Products is analyzing a proposed project with expected sales of 6300 units +-5%. The expected variable cost per unit is $8 and the expected fixed costs are $22000. Cost estimates are considered accurate within a range of +-4%. The depreciation expense is $6400. The sale price is estimated at $17 per unit, +-1%. What is the sales revenue under the pessimistic case scenario? Multiple choice $107100 $125685 $94684 $106029 $100728The most likely outcomes for a particular project are estimated as follows: Unit price: Variable cost: Fixed cost: Expected sales: 50 24 30 $370,000 36,000 units per year However, you recognize that some of these estimates are subject to error. Suppose that each variable may turn out to be either 10% higher or 10% lower than the initial estimate. The project will last for 10 years and requires an initial investment of $1.4 million, which will be depreclated straight-line over the project life to a final value of zero. The firm's tax rate is 21% and the required rate of return is 14%. (For all the requirements, a negative amount should be indicated by a minus sign. Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to the nearest dollar amount.) a. What is project NPV in the best-case scenario, that is, assuming all variables take on the best possible value? b. What is project NPV in the worst-case scenario?1. What is sensitivity analysis? 2. Perform a sensitvity analysis on the unit sales, salvage value, and WACC for a project. Assume that each of these variables deviates from its base-case, or expected value by plus or minus 10%, 20%, and 30%.The base case value for unit sales is 150,000. Calculate NPV for each case (18 NPV in total), then draw a graph with three lines (one for unit sales, one for salvage value, and one for WACC). At the end, perform a sensitivity analysis for the project (what you have seen, what conclusions you can make?). 3. What is the primary weakness of sensitvity analysis? What are its primary advantages?
- The most likely outcomes for a particular project are estimated as follows: Unit price: Variable cost: Fixed cost: Expected sales: $ 50 $ 30 $ 490,000 48,000 units per year However, you recognize that some of these estimates are subject to error. Suppose each variable turns out to be either 10% higher or 10% lower than the initial estimate. The project will last for 10 years and requires an initial investment of $2.3 million, which will be depreciated straight-line over the project life to a final value of zero. The firm's tax rate is 21%, and the required rate of return is 10%. a. NPV b. NPV a. What is project's NPV in the best-case scenario, that is, assuming all variables take on the best possible value? b. What is project's NPV in the worst-case scenario? Note: For all the requirements, a negative amount should be indicated by a minus sign. Enter your answers in dollars, not in millions. Do not round intermediate calculations. Round your answers to the nearest dollar amount. 4Sloan Corporation has the following estimates for its new gear assembly product: Price per unit = $1,220 Variable cost per unit = $380 Fixed costs = $3.75 million Quantity = 90,000 units Suppose the company believes all its estimates are accurate only to within +/- 15%. A. What values should the company use for the four variables given here when it performs its best-case scenario analysis? B. What should it use for its worse-case scenarios analysis? C. Are there any potential concerns with the building of these scenarios?A proposed project has fixed costs of $7,400, depreciation expense of $1,320, and a sales quantity of 1,600 units. The total variable costs are $5,607. What is the contribution margin per unit if the projected level of sales is the accounting break-even point? Question 10 options: $6.28 $4.63 $5.45 $5.16 $8.13
- The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. The selling price for the product will be $45 per unit. Probability distributions for the purchase cost, the labor cost, and the transportation cost are estimated as follows: ProcurementCost ($) Probability LaborCost ($) Probability TransportationCost ($) Probability 10 0.2 18 0.25 2 0.74 12 0.35 20 0.35 5 0.26 13 0.45 22 0.1 25 0.3 Compute profit per unit for the base-case, worst-case, and best-case scenarios.Profit per unit for the base-case: $ fill in the blank 1Profit per unit for the worst-case: $ fill in the blank 2Profit per unit for the best-case: $ fill in the blank 3 Construct a simulation model to estimate the mean profit per unit. If required, round your answer to the nearest cent.Mean profit per unit = $ fill in the blank 4 Why is the simulation approach to risk analysis preferable to generating a variety of…Peform a sensitivity analysis by answering the following questions: A. What is the break-even point in sales dollars for RBC? B. What is the margin of safety for RBC? C. What sales dollars would be required to achieve an operating profit of $170,000? $440,000?Hanisch Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $32 per unit, management projects sales of 30,000 units. The new product would require an investment of $300,000. The desired return on investment is 16%. The target cost per unit is closest to: (Do not round intermediate calculations.) Question 10 options: $40.00 $30.40 $3.20 $32.00
- 8. Modified Internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $400,000. The project's expected cash flows are: Year Year 1 Year 2 Year 3 Year 4 Cash Flow $325,000 -200,000 425,000 475,000Currently, the unit selling price of a product is $200, the unit variable cost is $160, and the total fixed costs are $408,000. A proposal is being evaluated to increase the unit selling price to $220. a. Compute the current break-even sales (units). 8,400 X units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. 5,600 X unitsThe estimates for a project appear in the following table: Dear optimistic most likely pessimist Fixed cost($) 250,000 250,000 250,000 Annual profit ($) 20,000 15,000 8,000 Shelf life(years) 30 30 30 Residual value($) 0 00 to. Use the range of values to calculate the heavy average of benefits. b. Using the heavy average, calculate the Equivalent Average Present Value for this project. Use a MARR of 10%. Heavy average annual benefits =$ ; Average Present Value = $ 2 points. To receive credit results have to match submitted procedures. c. Send the calculations made to arrive at the answer through the Spreadsheet icon.