Assume alpha company is considering producing new widget

Assignment Help Financial Management

Reference no: EM131082904

Assume the alpha company is considering producing a new widget. the required machinery will cost 1,200,000 it will be depreciated using a 5-year macrs asset life. alpha has already spent 250,000 in renovations to make room for the new machinery(expensed in 1 year) apha expects to sell 150,000 widgets each year for the next 4 years at a 12 sale price per unit and a $5 varaable cash cost per unit. 20% of the sales will come from customers of alphas existing widget, which sells for $10 per unit and has a $6 varaible cash cost per unit. aplha will incur $60,000 in fixed cash operating costs each year. alpha expects to sell machinery at the end of year 4 for 150,000 the companies tax rate is 30% and relevant cost of capital is 20%

Reference no: EM131082904

Questions Cloud

Manufactures airplanes for use in stunt shows : Maverick Wings, Inc. manufactures airplanes for use in stunt shows. Maverick's factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each plane has dif..

Future career as a healthcare admininstrator : Create a 700- to 1,050-word plan for building your personal brand. In your plan, include the following: What skills you will need for your future career as a Healthcare Admininstrator

About the firm operating cycle : Which of the following would SHORTEN the firm's Operating Cycle all else the same?

Emphasis on testing in schools : What may be the result of the ever-increasing emphasis on testing in schools? Quotas for speeding tickets? Plow truck drivers working longer hours for high overtime pay?

Assume alpha company is considering producing new widget : Assume the alpha company is considering producing a new widget. the required machinery will cost 1,200,000 it will be depreciated using a 5-year macrs asset life. alpha has already spent 250,000 in renovations to make room for the new machinery(expen..

Explain in detail why you believe it will be a major issue : Predict what the major issue discussed in this course will be 20 years from now. Explain in detail why you believe it will be a major issue.

Question regarding the project learning : "Project Learning." Please respond to the following: Continue to consider the project identified in Discussion 1.

The average cost per discharge in the industry : Last year, General hospital discharged a total of 19,231 patients. Its occupancy rate was 83%. Total operating expenses were $101 million. The average cost per discharge in the industry was $5,446. Based on this information, General hospital’s averag..

User Account

All Pages