Calculate the present value break-even point

Assignment Help Financial Management
Reference no: EM13938518

Calculate the present value break-even point (also called the financial break-even point).

Initial Investment: $700

Fixed Cost: $200 per year

Variable Cost: $3 per unit

Depreciation: $140 per year

Price: $8 per unit

Discount Rate: 12%

Project Life: 3 years

Tax Rate: 34%

Reference no: EM13938518

Questions Cloud

Describe the symptoms of that disease : Using Google (not Google Scholar), describe content from a source or sources claiming a treatment for which there exists little or no evidence or scientific plausibility for its efficacy. Describe what makes the treatment questionable.
Program to compute the weekly wages repeatedly : It contains the C++ wages program using a repeat loop in order to enable the user to compute several wages. The loop ends when the user enters -1 for either the hours_worked or the pay_rate. C++ uses the "do" keyword instead of "repeat".
Proceeds are used to repurchase outstanding stock : An unlevered firm with a market value of $1 million has $50,000 shares outstanding. The firm restructures itself by issuing 200 new bonds with an 8% coupon. Proceeds are used to repurchase outstanding stock. Ignoring taxes, what is the break even EBI..
What depreciation method does abercrombie and fitch use : What depreciation method does Abercrombie & Fitch use? What depreciation method does Aeropostale use? What are the typical useful lives of each company's operating assets?
Calculate the present value break-even point : Calculate the present value break-even point (also called the financial break-even point). Initial Investment: $700. Fixed Cost: $200 per year
Duration of the project at an interest rate : In OLQ2 and GSPT1 you did numerous duration calculations for a variety of bonds. Examining your results, explain how your results illustrate the following claims (from slides 41-42 of your week 06 lecture).
Best choice for a market index in the regression : Legion, Inc. is a small high tech firm whose stock trades on the NASDAQ. You want to estimate the stock's beta using a regression based on the empirical market line. That requires regressing the stock's returns against the contemporaneous returns on ..
Identify the current software security threats : The CISO often thinks that The Open Web Application Security Project (OWASP) is a good source to identify the current software security threats.
What results from other tests would contribute to diagnosis : Although a bone density scan is the test that verifies a diagnosis of osteoporosis, what results from the other tests (chemistry profile, thyroid studies, urinalysis, and CBC) would contribute to the diagnosis?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the dollar amount of income

London purchased a piece of real estate last year for $85,000. The real estate is now worth $103,500. If London needs to have a total return of 0.20 during the year, then what is the dollar amount of income that she needed to have to reach her object..

  New investment that it plans to finance using one-third debt

The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. the firm can sell new $1000 par value bonds with a 15 year maturity at a price of $947 that carry a coupon interest rate of 12.8 percent that is..

  Different types of value in the valuation process

Valuation of a firm's financial assets is said to be based on what is expected in the future, in terms of the future performance of the firm, the industry, and the economy. What types of value would you consider when assigning value to a firm's stock..

  What is the future value if payments are an annuity due

Suppose you are going to receive $17,500 per year for five years. The appropriate interest rate is 10 percent. What is the present value of the payments if they are in the form of an ordinary annuity? What is the future value if the payments are an a..

  What will be the beta of the new portfolio

You hold a diversified portfolio of a $10,000 investment in each of the different common stocks (I.e, your total investment is$150,000). The portfolio beta is equal to 1.0, you have decided to sell one of your stocks which has a beta equal to 1.8 for..

  How would single-rate allocation differ from dual-rate

Jug City, Inc. has two divisions within its one central plant: Forming Division and the Kilning Division. The following data apply to the coming budget year: If dual-rate allocation method is used, what amount will be allocated to the both divisions?..

  Basic interest rate swap and futures positions

Suppose that you buy an interest rate cap on three month LIBOR with a two year maturity and simultaneously sell a floor on three month LIBOR with a two year maturity. Ignore the premiums. Draw a profit diagram that indicates when you will gain and lo..

  Economic system lies between capitalism and communism

What type of economic system lies between capitalism and communism? Explain why it is more effective than other economic systems. Discuss the positive aspects of globalization, and contrast these with the negative aspects of globalization from the pe..

  Users glean from an analysis of the statement of cash flows

Referencing this week’s readings and lecture, describe the following terms as they relate to the statement of cash flows: cash, operating activities, investing activities, and financing activities. What can creditors, investors, and other users glean..

  Valuate berkshire hathaway with two different methods

Valuate berkshire hathaway (BRK) with two different methods. Use discounted cash flows in conjunction with an appropriate ratio. How does the share price compare to the calculated valuations?

  Example of how taking compensation personally

Explain with examples the “total returns” people receive from work. Compensation for many people is an inherently personal and emotional issue. Express your opinion and give an example of how “taking compensation personally,” can play-out on the job.

  An assignable loan contract executed

An assignable loan contract executed 3 months ago requires two payments of $3,900 plus interest at 9% from the date of the contract, to be paid 4 and 8 months after the contract date. The payee is offering to sell the contract to a finance company in..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd