Item Freezer Freezer B A Freezer ($25,000 ($30,000) Cost Annual (3,600) (4,000) Electric 5,000 Salvage 6,000 Value Life in 11 Years Cost of 6.00% Capital 11 B) $47,539.67 C) $50,232.02 D) $58,913.56 6.00% A restaurant is trying to determine the lowest total cost for purchasing a replacement freezer. The cost of capital is 6 percent and the freezer should last for 11 years. Using Table 9-2, what is the total cost for Freezer A? A) $28,600.00

Item Freezer Freezer B A Freezer ($25,000 ($30,000) Cost Annual (3,600) (4,000) Electric 5,000 Salvage 6,000 Value Life in 11 Years Cost of 6.00% Capital 11 B) $47,539.67 C) $50,232.02 D) $58,913.56 6.00% A restaurant is trying to determine the lowest total cost for purchasing a replacement freezer. The cost of capital is 6 percent and the freezer should last for 11 years. Using Table 9-2, what is the total cost for Freezer A? A) $28,600.00

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

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4. A regional super market chain is deciding whether to install a machine in each of its stores. Each machine costs $250,000. Projected income per machine is as follows: Figs are all in $ Year 1 2 3 4 5Sales 250,000 300,000 300,000 250,000 250,000Operating Expenses 200,000 200,000 200,000 200,000 200,000Depreciation 50,000 50,000 50,000 50,000 50,000Accounting Income 0 50,000 50,000 0 0 a) Why would the store continue to operate a machine in Year 4 and 5 if it produces no profits?b) What are the cash flows for investing in a machine? Assume each machine is completely depreciated and has no salvage value at the end of its 5 years life.
4. A regional super market chain is deciding whether to install a machine in each of its stores. Each machine costs $250,000. Projected income per machine is as follows: Figs are all in $ Year 3. 5. Sales Operating Expenses Depreciation Accounting Income 250,000 200,000 50,000 300,000 200,000 300,000 200,000 50,000 50,000 250,000 200,000 250,000 200,000 50,000 50,000 50,000 50,000 a) Why would the store continue to operate a machine in Year 4 and 5 if it produces no profits? b) What are the cash flows for investing in a machine? Assume each machine is completely depreciated and has no salvage value at the end of its 5 years life.
Using this information below, answer the following question: What is the Net Income required? Total sales amount to $2,000,000 Food generates 75% of total sales Food cost is $500,000 Beverages generated sales of $300,000 with a CMR of 0.85 The gift store generated the remaining sales at a cost of 30% Tax rate is 27% Annual fixed costs total $1,500,000 Group of answer choices $1,080,000 $1,010,000 $1,000,000 $1,090,000
Problem 2: The XYZ company collected recipes from members and published a cookbook. The book sells for $18 per copy. The company estimates that the club must sell 2000 books to breakeven on its $4,000 investment, What is the variable cost per unit assumed in this analysis?
SkyPie is a mom and pop bakery in Detroit. It costs them $2.59 to make a single rhubarb pie. They sel the pies for $7.10 each. What percent of the new price of a pie (with the 10% increase) does the cost now represent? 0.0% percent () SUBMIT ANSWER PS2 2 3 4 EXIT CALCULATED VARIABLES: newmargin $5.22 newprice $7.81 margin $4.51 costpct = 0.365 (36.5%)
ou are preparing to produce some goods for sale. You will sell them in one year and you will incur costs of $ 76,000 immediately. If your cost of capital is 7%. What is the minimum dollar amount you need to sell the goods for in order for this to be a non-negative NPV? Question content area bottom Part 1 The minimum dollar amount is $XXX enter your response here .
Jackson amp; Sons uses packing machines to prepare its products for shipping. One machine costs $178,000 and lasts about 5 years before it needs replaced. The operating cost per machine is $16,000 a year. What is the equivalent annual cost of one machine if the required rate of return is 12 percent? Select one: O O O O O a. $81,006.15 b. $65,378.93 c. $54,224.08 d. $79,004.12 e. $38,556.67
Night Shades Inc. (NSI) manufacturers biotech sunglasses. These sunglasses sell for $150 each, and cost $70 each to produce. Night Shades Inc. has fixed costs of $100,000.a. Calculate Night Shades' Breakeven point.b. how much profit (loss) will Night Shades have if it sells 500 sunglasses? 4,000 sunglasses?c. Night Shades' manager expects an operation profit of $200,000. How many sunglasses must be sold to attain this profit?
5.5 You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 Medical supplies 50,000 Administrative supplies 10,000 Assume that all costs are fixed, except supply costs, which are vari-able. Furthermore, assume that the clinic must pay taxes at a 30 per-cent rate. a.Construct the clinic’s projected P&L statement. b.What number of visits is required to break even? c.What number of visits is required to provide you with an after-tax profit of $100,000?
A supermarket chain buys loaves of bread from its supplier at $0.55 per loaf. The chain is considering two options to bake its own bread. Machine A Machine B Capital investment Useful life (years) $9,000 $14,500 8 8 $2,000 $0.24 $4,500 $0.18 Annual fixed cost Variable cost per loaf Neither machine has a market value at the end of eight years, and MARR is 15% per year. What is the minimum number of loaves that must be sold per year to justify installing Machine A instead of buying the loaves from the supplier?
Pizza Hut can produce 5000 pizzas per year. The cost of home delivery to the household is RO 25. The cost to prepare the pizza is RO 16 and the holding cost is 25% of the cost. What is the total carrying costs? a. RO 1000 O b. RO 250 O c. RO 500 d. RO 750
A restaurant has three main products: drinks, meals and desserts. Fixed costs are $397,000. Other financial information is as follows: Item drinks: meals desserts Average Purchase (in S) 10 25 10 Average Margin Total Sales Dollars (in %) 40 50 10 60% 20% 70% What are total sales (in dollars) needed to make a profit of $200,000, assuming that the sales mix remains constant? How many drinks would they need to sell in order to make a profit of $200,000, assuming that the sales mix remains constant.

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