Thompson's has determined that a new project has expected fixed costs of $132,378, a contribution margin of $36.20, and a tax rate of 21 percent. The investment has an initial cost of $548,000 that will be depreciated straight-line to zero over the 5-year life of the project. At what sales quantity per year will the investment break even on a financial basis if the required return is 15%?

Q: We are evaluating a project that costs $907,000, has an 14-year life, and has no salvage value.…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: An investor was presented with a production line project in which the investment volume is 285,000…

A: The question is related to the Return on Investment and Breakeven Point. The Return on Investment is…

Q: The investment cost is $23,889 and the equipment will have a market value of $5,060 at the end of a…

A: Investment cost = $ 23,889 Market value after 5 years = $ 5,060 Annual cash inflow = $ 8,352 MARR =…

Q: SummerTyme Inc is considering a new three year expansion project that requires an initial fixed…

A: Hi, there, thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Modern Artifacts can produce keepsakes that will be sold for $70 each. Non-depreciated fixed costs…

A:

Q: our firm is cons

A: The average accounting return can be calculated as follows : Results obtained :

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A: 1.Payback period is the amount of time require for firm to recover its intial investment. Payback…

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A: ARR or accounting rate of return for any investment is the expected rate of return ( in percentage)…

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A: Net operating income =sales-variable cost-fixed cost  Operating cash flow =(net operating income…

Q: A project under consideration costs $750,000, has a five-year life and has no         salvage…

A: Here, Cost of the project = $750,000 Useful life =5 years Depreciation = Straight-Line Salvage value…

Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…

A: Initial investment is $2,400,000 Tax rate is 23% Required rate of return  is 10% Estimated annual…

Q: We are evaluating a project that costs $660,000, has a life of 5 years, and has no salvage value.…

A: Cash flows are the series of payment of the income received over the period of time on the initial…

Q: Cullumber Corp. management is expecting a project to generate after-tax income of $76,300 in each of…

A: Average After Tax Income = 76,300 Average Book Value of Equipment = 194,140

Q: XYZ Co. is evaluating whether to invest in a project with the following information: Project cost…

A: Depreciation = Cost of asset / Life Depreciation = $950,000 / 5 Depreciation = $190,000

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Q: You are considering a new product launch. The project will cost $1,675,000, have a four- year life,…

A:

Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…

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Q: Shelly's Boutique is evaluating a project which will increase annual sales by $70,000 and annual…

A: Annual Sales = 70,000 Annual Costs = 40,000 Investment in fixed assets = 100,000 SLM method of…

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A: Cost of goods sold = Sales x 60% = $10000 x 60% = $6,000

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A: Given: Particulars Base case Sales $380,000.00 Cost $269,000.00 Tax rate =21%

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A: Cash flows refer to the series of cash payments and receipts over the period of time. Net present…

Q: What is the project’s NPV?

A: Net Present Value method (NPV) is a capital budgeting method used for finding the profitability…

Q: We are evaluating a project that costs RM604,000, has an 8-year life, and has no salvage value.…

A: Initial cost = $604000 Depreciation as per SLM = (604000 -0)/8 = 75500 Depreciation tax shield =…

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A: In this we have to find out the present value and equivalent annual cost.

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A: Formulas:

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A: -

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A: Computation:

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A: To compute the annual equivalent worth (AEW), we will first compute the NPV and then use the PMT…

Q: You are considering a new product launch. The project will cost $1,675,000, have a four- year life,…

A: Net present value is the difference between the present value of cash inflows and present value of…

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A: The payback period will be used to evaluate projects and determine the number of years it will take…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.