ccessories. You need our marketing team

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 2TP: Austins cell phone manufacturer wants to upgrade their product mix to encompass an exciting new...
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Your society specialized in cameras wants to launch a new range of lenses and
accessories. You need to invest 500,500.00£ in research and development.
Your marketing team will need 900 000£ and you have to buy a new property
dedicated to that activity for 1 500 000€. The fixed charges of the property are
estimated at 2 000 000€.
You also need to invest in machines with high tech that will at least cost you 2
000 000£.
You must hire a new technician and a project manager that will respectively
have a wage of 2000£ and 3500£.
They foresee the turnover and the variable cost as follow.
N+1
N+2
N+3
N+4
N+5
Turnover
5,000,000.00 £ 9,000,000.00 £ 9,000,000.00 £ 17,000,000.00 £ 25,000,000.00 £
Variable
4,500,000.00 £ 3,000,000.00 £ 4,000,000.00 £
5,000,000.00 £
4,000,000.00 £
costs
The cost of capital is equal to 9%.
Calculate the payback
Clue : you pay 33% taxes on your gross profit. The salaries are paid after that
the taxes have been deducted.
Transcribed Image Text:Your society specialized in cameras wants to launch a new range of lenses and accessories. You need to invest 500,500.00£ in research and development. Your marketing team will need 900 000£ and you have to buy a new property dedicated to that activity for 1 500 000€. The fixed charges of the property are estimated at 2 000 000€. You also need to invest in machines with high tech that will at least cost you 2 000 000£. You must hire a new technician and a project manager that will respectively have a wage of 2000£ and 3500£. They foresee the turnover and the variable cost as follow. N+1 N+2 N+3 N+4 N+5 Turnover 5,000,000.00 £ 9,000,000.00 £ 9,000,000.00 £ 17,000,000.00 £ 25,000,000.00 £ Variable 4,500,000.00 £ 3,000,000.00 £ 4,000,000.00 £ 5,000,000.00 £ 4,000,000.00 £ costs The cost of capital is equal to 9%. Calculate the payback Clue : you pay 33% taxes on your gross profit. The salaries are paid after that the taxes have been deducted.
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