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Sales of a product was estimated at 80,000 pieces annually with a rate of 6 pu. Its variable mfg. costs are 2.50 pu with S&D and general expenses related to product  is 59,000 on annual basis. Its fixed manufacturing costs (excluding depreciation) at 45,000 on annual basis. Investment made is 350,000 with related to various molds & equipment. The equipment have a 3 year life with ending salvage value of 20,000.Tax at 40%. Calculate the estimated increase in annual level of net income from the planned manufacture and sale of the product.

Sales of a product was estimated at 80,000 pieces annually with a rate of 6 pu. Its variable mfg. costs are 2.50 pu with S&D and general expenses related to product  is 59,000 on annual basis. Its fixed manufacturing costs (excluding depreciation) at 45,000 on annual basis. Investment made is 350,000 with related to various molds & equipment. The equipment have a 3 year life with ending salvage value of 20,000.Tax at 40%. Calculate the estimated increase in annual level of net income from the planned manufacture and sale of the product.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
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Sales of a product was estimated at 80,000 pieces annually with a rate of 6 pu. Its variable mfg. costs are 2.50 pu with S&D and general expenses related to product  is 59,000 on annual basis. Its fixed manufacturing costs (excluding depreciation) at 45,000 on annual basis.

Investment made is 350,000 with related to various molds & equipment. The equipment have a 3 year life with ending salvage value of 20,000.Tax at 40%.

Calculate the estimated increase in annual level of net income from the planned manufacture and sale of the product.

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