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Could you please help to answer the below question and show how this could be determined in excel as well?
Sensitivity Analysis and Break-Even Point. We are evaluating a project that costs $604,000, has an 8 year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 55,000 units per year. Price per unit is $36, variable cost per unit is $17, and fixed costs are $685,000 per year. The tax rate is 21 percent and we require a return of 15 percent on this project.
a) Calculate the accounting break-even point.
b) Calculate the base-case cash flow and NPV. What is the sensitivity of NPV to changes in the sales figure? Explain what your answer tells you about a 500-unit decrease in projected sales.
c) What is the sensitivity of OCF to changes in the variable cost figure? Explain what your answer tells you about a $1 decrease in estimated variable costs.
The Gamma Systems Manufacturing Corporation has reached its maturity stage and its net sales are expected to grow at a 6 percent compound rate for the foreseeable future. Management believes that as a mature venture the appropriate equity discount r..
you would have to borrow funds from your bank at a nominal 12%, daily compounding based on a 360-day year. You want to increase your base prices by exactly enough to offset your bank interest cost. To the closest whole percentage point, by how much s..
Next, write 8-12 questions to determine whether your idea will be popular. Remember to use the principles for writing effective questions described in this chapter.
bummel and strand corp. has a gross profit margin of 33.7 percent sales of 47112365 and inventory of 14595435. what is
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If a buyer purchases a home with the cash proceeds of the mortgage loan plus an additional 20 percent down, what is the purchase price of the home?
Follies Bookstore, the only bookstore close to campus, had a net income of $90,000 in 2009. Here are some of the financial ratios from the annual report
The following table shows a short-run production function for laptop computers. Use the data to determine where diminishing product begins.
(Weighted average cost of capital) the capital structure for the Carion Corporation is provided here. The company plans to maintain its debt structure in the future. If the firm has an after-tax cost of debit of 6.3 percent, a cost of preferred stock..
Assume that the cash account includes only required cash. Determine the dollar amount of equity valuation cash flow for 2011. B. Now assume that Global Products' required cash is set at 3 percent of sales. Any additional cash would be surplus cash. R..
abc company an unleveraged firm has a total market value of 10 million consisting of 500000 shares of common stock
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