The company sets a new to the company revenue of 20,000,000.00 pesos for its soon to launched corned beef. Since this is a slight improvement of its existing SKU, the NPD team pegged a cannibalization of 45%. In this situation, the monetary equivalent of the cannibalization rate is _______ and the net fresh to the company revenue is _______.
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The company sets a new to the company revenue of 20,000,000.00 pesos for its soon to launched corned beef. Since this is a slight improvement of its existing SKU, the NPD team pegged a cannibalization of 45%. In this situation, the monetary equivalent of the cannibalization rate is _______ and the net fresh to the company revenue is _______.
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- Hayden Inc. has a number of copiers that were bought four years ago for $29,000. Currently maintenance costs $2,900 a year, but the maintenance agreement expires at the end of two years, and thereafter, the annual maintenance charge will rise to $8,900. The machines have a current resale value of $8,900, but at the end of year 2, their value will have fallen to $4,400. By the end of year 6, the machines will be valueless and would be scrapped.Hayden is considering replacing the copiers with new machines that would do essentially the same job. These machines cost $34,000, and the company can take out an eight-year maintenance contract for $1,200 a year. The machines would have no value by the end of the eight years and would be scrapped.Both machines are depreciated using seven-year straight-line depreciation, and the tax rate is 40%. Assume for simplicity that the inflation rate is zero. The real cost of capital is 7%.a. Calculate the equivalent annual cost, if the copiers are: (i)…Hayden Inc. has a number of copiers that were bought four years ago for $30,000. Currently maintenance costs $3,000 a year, but the maintenance agreement expires at the end of two years, and thereafter, the annual maintenance charge will rise to $9,000. The machines have a current resale value of $9,000, but at the end of year 2, their value will have fallen to $4,500. By the end of year 6, the machines will be valueless and would be scrapped.Hayden is considering replacing the copiers with new machines that would do essentially the same job. These machines cost $25,000, and the company can take out an eight-year maintenance contract for $1,800 a year. The machines would have no value by the end of the eight years and would be scrapped.Both machines are depreciated using seven-year straight-line depreciation, and the tax rate is 40%. Assume for simplicity that the inflation rate is zero. The real cost of capital is 7%.a. Calculate the equivalent annual cost, if the copiers are: (i)…Hayden Inc. has a number of copiers that were bought four years ago for $25,000. Currently maintenance costs $2,500 a year, but the maintenance agreement expires at the end of two years, and thereafter, the annual maintenance charge will rise to $8,500. The machines have a current resale value of $8,500, but at the end of year 2, their value will have fallen to $4,000. By the end of year 6, the machines will be valueless and would be scrapped.Hayden is considering replacing the copiers with new machines that would do essentially the same job. These machines cost $30,000, and the company can take out an eight-year maintenance contract for $1,500 a year. The machines would have no value by the end of the eight years and would be scrapped.Both machines are depreciated using seven-year straight-line depreciation, and the tax rate is 40%. Assume for simplicity that the inflation rate is zero. The real cost of capital is 7%.a. Calculate the equivalent annual cost, if the copiers are: (i)…
- The production department of Y Company is planning to purchase a new machine to improve product quality. The company’s management accountant is currently evaluating two options- Buy the machine OR Rent it. Following information is available:I. The company has to pay £3,200 to set up the machine. Insurance cost £450 per annum. II. If it is bought, the new machine is depreciated on reducing balance basis at the rate of 25%. After various calculations, the company has to pay £4,200 maintenance cost every year and estimated repair cost would be £300 per year. The firm will have to sell old machines, which had cost £65,000 six years ago. Apart from the above information, the £500 of delivery cost is incurred for this purchase option.III. If it is rented, £ 4,650 per year to pay as rent. There is no cost for repair and maintenance. However, the firm is required to pay the administration charge of £650 with this rent option. For rent option, the delivery cost remains at 20% of the £ 500 (the…In 2016, the city of Abu Dhabi collected $24 million in fines from motorists because of traffic violations caught by red-light cameras. The cost of operating the system was $14.5 million. The net profit, that is, profit after operating costs, is split equally (that is, 50% each) between the city and the operator of the camera system. What will be the rate of return over a 3-year period to the contractor that paid for, installed, and operates the system, if its initial cost was $10 million and the profit for each of the 3 years is the same as it was in 2016? Should the company invest in this project at MARR of 15% per year?Adler is replacing its old packing line with a more efficient line. The old line was being depreciated on a straight-line basis at a rate of $20,000 per year. The old machine has a current book value of $100,000. The new line, which costs $910,000, will be depreciated on a 10-year MACRS schedule. The more efficient operation is expected to increase revenues by $50,000 per year and reduce annual operating costs by $80,000. Compute the net cash flows for Adler in year 2. Assume Adler has a marginal tax rate of 40%. Use the rounded MACRS schedule listed below: (10-Year Depreciation Schedule: 10%, 18%, 14%, 12%, 9%, 7%, 7%, 7%, 7%, 6%, 3%)
- The production department of a Company is planning to purchase a new machine to improve product quality. The company’s management accountant is currently evaluating two options- Buy the machine OR Rent it. The following information is available: The company has to pay £3,200 to set up the machine. Insurance cost £450 per annum. If it is bought, the new machine is depreciated on reducing balance basis at the rate of 25%. After various calculations, the company has to pay £4,200 maintenance cost every year and the estimated repair cost would be £300 per year. The firm will have to sell old machines, which had cost £65,000 six years ago. Apart from the above information, the £500 delivery cost is incurred for this purchase option. If it is rented, £4,650 per year to pay as rent. There is no cost for repair and maintenance. However, the firm is required to pay the administration charge of £650 with this rent option. For rent option, the delivery cost remains at 20% of the £500 (the…The production department of Y Company is planning to purchase a new machine to improve product quality. The company’s management accountant is currently evaluating two options- Buy the machine OR Rent it. The following information is available: The company has to pay £3,200 to set up the machine. Insurance costs £450 per annum. If it is bought, the new machine is depreciated on a reducing balance basis at the rate of 25%. After various calculations, the company has to pay £4,200 maintenance cost every year, and the estimated repair cost would be £300 per year. The firm will have to sell old machines, which had cost £65,000 six years ago. Apart from the above information, the £500 delivery cost is incurred for this purchase option. If it is rented, £ 4,650 per year to pay as rent. There is no cost for repair and maintenance. However, the firm is required to pay the administration charge of £650 with this rent option. For the rent option, the delivery cost remains at 20% of the £ 500…The RV company, engaged in the fabrication of automobile engine part withproduction capacity of 700,000 units per year, is only operating at 65% capacity due to unavailability of the necessary foreign currency to finance the importation of their raw materials. The current annual income is P450,000; annual fixed costs are P190,000 and variable cost are P0.35 per unit. A) What is the current profit/loss? B) What is the breakeven point in units and in pesos? C) Draw the breakeven chart.
- The ML Company imported a new machine at a peso equivalent of $1,320,000. The company has to pay additional cost of importing the asset such as $40,000 import duties and $60,000 non-refundable purchase taxes. Costs of transporting the asset was $20,000 and cost of preparing the asset for its intended use include $12,000 installation and $8,000 testing and trial run costs. How much is the initial cost of the new machine?A firm is charged P150 per ton for hauling its raw materials by a trucking company. Forty tons per day are hauled for 300 days a year. It is a desired to install a railway system which would bring down the cost of,hauling to P6.60 per ton. Maintenance cost of this is P12,000 per month. Tax is 1%. Average rate of earning is 20%. (a) If the company has the cash necessary for the installation would you recommend the change?(b) If the company has to float P5,000,000 worth of non callable bonds at 15% that will mature in 10 years to have the capital. for the project, would you recommend the change? Ans. (a) Rate of return is 26,68%. investment is justified.(b) Rate of return is 10.61% investment is not justified.Last year, a battery manufacturing company in Toronto incurred a loss of $716,000.00 by producing and selling 39,000 batteries. If their total revenue for the year was $14,000,000.00 and the break-even volume of the plant is 52,100 batteries, calculate: a. The selling price of each battery b. The variable costs for each battery?