Ayden's Toys, Inc., just purchased a $530,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its 5-year economic life. Each toy sells for $30. The variable cost per toy is $14 and the firm incurs fixed costs of $390,000 per year. The corporate tax rate for the company is 24 percent. The appropriate discount rate is 12 percent. What is the financial break-even point for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even point units
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- Ayden’s Toys, Inc., just purchased a $475,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its 6-year economic life. Each toy sells for $19. The variable cost per toy is $6 and the firm incurs fixed costs of $335,000 per year. The corporate tax rate for the company is 23 percent. The appropriate discount rate is 11 percent. What is the financial break-even point for the project?Ayden's Toys, Incorporated, just purchased a $515,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its 8-year economic life. Each toy sells for $27. The variable cost per toy is $9 and the firm incurs fixed costs of $375,000 per year. The corporate tax rate for the company is 21 percent. The appropriate discount rate is 9 percent. What is the financial break-even point for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even point unitsAyden's Toys, Incorporated, just purchased a $480,000 machine to produce toy car The machine will be fully depreciated by the straight-line method over its 7-yea economic life. Each toy sells for $20. The variable cost per toy is $7 and the firm incur fixed costs of $340,000 per year. The corporate tax rate for the company is 24 percen The appropriate discount rate is 12 percent. What is the financial break-even point fc the project? (Do not round intermediate calculations and round your answer to decimal places, e.g., 32.16.) Financial break-even point units
- Ayden’s Toys, Incorporated, purchased a $485,000 machine to produce toy cars. The machine will be fully depreciated by the straight line method over its five-year economic life. Each toy sells for $19. The variable cost per toy is $6 and the firm incurs fixed costs of $310,000 per year. The corporate tax rate for the company is 24 percent. The appropriate discount rate is 12 percent. What is the financial break-even point for the project?Flatte Restaurant is considering the purchase of a $10,800 soufflé maker. The soufflé maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 2,400 soufflés per year, with each costing $2.80 to make and priced at $5.65. Assume that the discount rate is 16 percent and the tax rate is 35 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPVA local delivery company has purchased a delivery truck for $15,000. The truck will be depreciated under MACRS is five-year property. The truck's market va lue (or selling price) is expected to be $2,500 less each year. The O&M costs are expected to be $3.000 per year. The firm is in a 40% tax bracket. and its MARR is 15%. Compute the annual-equivalent cost for retaining the truck for a two-year period, which will be(a) $5,527 (b) $5.J75 (c) $5,362 (cl) $5,014
- Avignon Restaurant is considering the purchase of a $10,100 soufflé maker. The soufflé maker has an economic life of four years and will be fully depreciated by the straight-line method. The machine will produce 2,050 soufflés per year, with each costing $2.45 to make and priced at $5.30. Assume that the discount rate is 14 percent and the tax rate is 21 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV: Should the company make the purchase? multiple choice • Yes • NoCandy Crush Inc. buys $1 million machine that will depreciate in straight line over the next 5 years. The machine is expected to make a new product that will generate new revenue of $1 million each year. Additional materials and administrative cost is expected to be 40% of the revenue. To finance the purchase, the company got a 5-year loan at 5% interest. Finally, corporate tax rate of Candy Crush is 20%. a) Based on the information given, construct the income statement of Candy Crush in year 1 and show its net income. b) What is the Cash Flow from Operation of Candy Crush in year 1? c) Construct Cash Flow from Investment and Cash Flow from Financing in year Assume that the loan is an amortized loan.Benton is a rental car company that is trying to determine whether to add 25 cars to its fleet. The company fully depreciates all its rental cars over four years using the straight-line method. The new cars are expected to generate $245,000 per year in earnings before taxes and depreciation for four years. The company is entirely financed by equity and has a 24 percent tax rate. The required return on the company’s unlevered equity is 14 percent and the new fleet will not change the risk of the company. The risk-free rate is 7 percent. a. What is the maximum price that the company should be willing to pay for the new fleet of cars if it remains an all-equity company? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose the company can purchase the fleet of cars for $615,000. Additionally, assume the company can issue $350,000 of four-year debt to finance the project at the risk-free rate of 7 percent. All principal…
- Benton is a rental car company that is trying to determine whether to add 25 cars to its fleet. The company fully depreciates all its rental cars over six years using the straight- line method. The new cars are expected to generate $195,000 per year in earnings before taxes and depreciation for six years. The company is entirely financed by equity and has a 23 percent tax rate. The required return on the company's unlevered equity is 12 percent and the new fleet will not change the risk of the company. The risk-free rate is 5 percent. a. What is the maximum price that the company should be willing to pay for the new fleet of cars if it remains an all-equity company? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose the company can purchase the fleet of cars for $700,000. Additionally, assume the company can issue $520,000 of six-year debt to finance the project at the risk-free rate of 5 percent. All principal will be repaid in…Gemini, LLC, invested $1 million in a state-of-the-art information system that promises to reduce processing costs for its purchasing activities by $120,000 per year for the next 10 years. The company will scrap its old information system and will receive no money as a consequence. The new system will be depreciated over 10 years at a rate of $100,000 per year. Gemini's tax rate is 30 percent, and the company has a 7 percent after-tax cost of capital. Required: What is the after-tax net present value of Gemini's new information system? Use the time value of money charts as needed for your calculations. If required, use a minus sign to indicate a negative net present value. Do not round intermediate amounts. Round your final answer to two decimal places.Benton is a rental car company that is trying to determine whether to add 25 cars to its fleet. The company fully depreciates all its rental cars over six years using the straight-line method. The new cars are expected to generate $195,000 per year in earnings before taxes and depreciation for six years. The company is entirely financed by equity and has a 23 percent tax rate. The required return on the company’s unlevered equity is 13 percent and the new fleet will not change the risk of the company. The risk-free rate is 6 percent. a. What is the maximum price that the company should be willing to pay for the new fleet of cars if it remains an all-equity company? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose the company can purchase the fleet of cars for $675,000. Additionally, assume the company can issue $470,000 of six-year debt to finance the project at the risk-free rate of 6 percent. All principal will…
