There is excitement in the air! The new UltraGuard flea collar is about to beintroduced to the market. The collar will feature enhanced protection, increasedlongevity and is environmentally friendly. It will be priced at $9.40 and has unitvariable costs of $3.45. The company expects to sell 50,000 UltraGuard collarsduring the next six months. Some of the sales will come at the expense of thecurrent product, the PetArmor collar, priced at $6.50 with variable costs of $2.80.Projected sales for the PetArmor collar are 95,000 units (without the introduction ofthe UltraGuard). The market analyst estimates that the UltraGuard collar willcannibalize 20,000 PetArmor collars during the introductory 6 month period.The company is planning a sales promotion campaign to target veternarians at thetime of the new product launch. The company is going to invest $ 75,000 in printedmaterials and samples.How many PetArmor collars will be sold at the breakeven volume of UltraGuardcollars? Round your answer to the nearest whole number.Your Answer:Answer

Break Even Sales is the level of sales where the total cost equals the total revenues. It is…

Answered: There is excitement in the air! The new…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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There is excitement in the air! The new UltraGuard flea collar is about to be introduced to the market. The collar will feature enhanced protection, increased longevity and is environmentally friendly. It will be priced at $9.20 and has unit variable costs of $3.90. The company expects to sell 50,450 UltraGuard collars during the next six months. Some of the sales will come at the expense of the current product, the PetArmor collar, priced at $6.75 with variable costs of $2.80. Projected sales for the PetArmor collar are 95,000 units (without the introduction of the UltraGuard). The market analyst estimates that the UltraGuard collar will cannibalize 20,000 PetArmor collars during the introductory 6 month period. Calculate the weighted contribution margin. Answer: x (3.73) Hide question 9 feedback Remember, the weighted contribution margin is calculated at the unit level.
There is excitement in the air! The new UltraGuard flea collar is about to be introduced to the market. The collar will feature enhanced protection, increased longevity and is environmentally friendly. It will be priced at $9.35 and has unit variable costs of $4.05. The company expects to sell 49,000 UltraGuard collars during the next six months. Some of the sales will come at the expense of the current product, the PetArmor collar, priced at $6.55 with variable costs of $3.45. Projected sales for the PetArmor collar are 95,000 units (without the introduction of the UltraGuard). The market analyst estimates that the UltraGuard collar will cannibalize 19,350 PetArmor collars during the introductory 6 month period. Čalculate the weighted contribution margin. The answer is 4.08 please show work
Amazon is considering using high capacity drones that would make its product deliveries more efficient. For this project, $125,000 would need to be spent right away to buy the required fleet of drones. The drones will be losing their economic value in equal amount each year, fully over their 6-year economic lives. Once the drones' economic life is over, they would all be sold for $9,300 selling price to a new owner, and Amazon would then immediately purchase the same but brand-new drones for the same price as what it paid for the initial fleet of drones. When those drones' life is over, they would again be sold and, again, brand-new ones would be purchased - all for the same prices as for the initial drones, and so on, over and over. Additional information: Amazon expects $9,600 in annual operating costs. • All future cash flows are year-end cash flows. ● Amazon pays 24 percent tax rate on all taxable income. • Amazon requires an annual discount rate of 9 percent, and the rate is not…
Parasite Engineering is developing a new product for the parasitic market that services parasites. The opportunity is estimated to be worth $1.0B measured in today’s dollars. The company will need to spend $500M today to begin the research. In five years, the company will have to make a decision as to whether to go into full scale production and begin selling the drug. At that time, the company estimates it will cost $1.5B to move forward. If the appropriate risk-free rate is 2.5%, how high must the annual volatility be to make the project worth beginning?
Amazon is considering using high capacity drones that would make its product deliveries more efficient. For this project, $116,000 would need to be spent right away to buy the required fleet of drones. The drones will be losing their economic value in equal amount each year, fully over their 6-year economic lives. Once the drones economic life is over, they would all be sold for $8,700 selling price to a new owner, and Amazon would then immediately purchase the same but brand-new drones for the same price as what it paid for the initial fleet of drones. When those drones' life is over, they would again be sold and, again, brand-new ones would be purchased - all for the same prices as for the initial drones, and so on, over and over. Additional information: . .. Amazon expects $9,300 in annual operating costs. All future cash flows are year-end cash flows. Amazon pays 21 percent tax rate on all taxable income. Amazon requires an annual discount rate of 10 percent, and the rate is not…
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Amazon is considering using high capacity drones that would make its product deliveries more efficient. For this project, $140,000 would need to be spent right away to buy the required fleet of drones. The drones will be losing their economic value in equal amount each year, fully over their 5-year economic lives. Once the drones' economic life is over, they would all be sold for $10,300 selling price to a new owner, and Amazon would then immediately purchase the same but brand-new drones for the same price as what it paid for the initial fleet of drones. When those drones' life is over, they would again be sold and, again, brand-new ones would be purchased - all for the same prices as for the initial drones, and so on, over and over. Additional information: • Amazon expects $10,100 in annual operating costs. . All future cash flows are year-end cash flows. • Amazon pays 24 percent tax rate on all taxable income. • Amazon requires an annual discount rate of 10 percent, and the rate is…
In a bio-based material recycling company, the operation managers are considering a twin-screw extruder with a price of 12,000 OMR and another 2,000 OMR will be spent for shipping and installation of the extruder. The estimated net income generated from this machine is 3,500 OMR per year. The extruder will be used for 5 years, and then it will be sold for an estimated market value of 2,500 OMR. The extruder MARCS property class is 5 years. If the effective income tax rate (t) is 40% and the after-tax MARR is 10%. (a) What is the after-tax IRR for this project? (use trial and error procedure and GDS) (b) Should this extruder be purchased by the company?
GSU Motor Works needs to select an assembly line for producing their new SUV. They have two options:• Option XYZ is a highly automated assembly line that has a large up-front cost but low maintenancecost over the years. This option will cost $114 million today with a yearly operating cost of $40million. The assembly line will last for 6 years and be sold for $48 million in 6 years.• Option GHI is a cheaper alternative with less technology, a longer life, but higher operating costs.This option will cost $168 million today with an annual operating cost of $32 million. Thisassembly line will last for 10 years and be sold for $23 million in 10 years.The firm’s cost of capital is 16%. Assume a tax rate of zero percent. The equivalent annual cost (EAC) for Option XYZ is $_______ million.The equivalent annual cost (EAC) for Option GHI is $_______ million.
BIG Pharmaceuticals Ltd. has invested $330,000 to date in developing a new typeof insect repellent. The repellent is now ready for production and sale, and theMarketing Manager estimates that the product will sell 170,000 bottles in the firstyear, 210,000 bottles in the second years and 260,000 bottles a year over the nextthree years. The selling price of the insect repellent will be $6.00 a bottle andvariable costs are estimated to be $3.00 a bottle. Second- and third-year price willbe $6.99 a bottle with a variable cost of $3.50 a bottle, Fourth- and fifth yearselling price will be $7.95 with a variable cost of $3.75. Fixed costs (excludingamortization) are expected to be $210,000 a year. The figure is made up of$165,000 additional fixed costs and $45,000 fixed costs relating to the existingbusiness that will be apportioned to the new business. These costs will increaseby 5% each year.To produce the repellent, machinery and equipment costing $650,000 will have tobe purchased…
BIG Pharmaceuticals Ltd. has invested $330,000 to date in developing a new typeof insect repellent. The repellent is now ready for production and sale, and theMarketing Manager estimates that the product will sell 170,000 bottles in the firstyear, 210,000 bottles in the second years and 260,000 bottles a year over the nextthree years. The selling price of the insect repellent will be $6.00 a bottle andvariable costs are estimated to be $3.00 a bottle. Second- and third-year price willbe $6.99 a bottle with a variable cost of $3.50 a bottle, Fourth- and fifth yearselling price will be $7.95 with a variable cost of $3.75. Fixed costs (excludingamortization) are expected to be $210,000 a year. The figure is made up of$165,000 additional fixed costs and $45,000 fixed costs relating to the existingbusiness that will be apportioned to the new business. These costs will increaseby 5% each year.To produce the repellent, machinery and equipment costing $650,000 will have tobe purchased…
A VMB pressure regulator allows gas suppliers and panel builders to provide compact gas handling equipment, thereby minimizing the space required in clean rooms. Veritech Micro Systems is planning to expand its clean room to accommodate a new product design team. The company estimates that it can reduce the space in the clean room by 7 square meters if it uses the compact equipment. If the cost of construction for a clean room is $5000 per square meter, what is the annual worth of the savings at 10% per year interest if the cost is amortized over 10 years?

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