Calculate volkswagen pre tax profit

Assignment Help Finance Basics

Reference no: EM132083232

Question: Volkswagen Company has developed a "clean diesel" car called the TDI. The TDIis slightly more powerful and fuel efficient than its competitors. Volkswagen can sell 100,000 of these cars per year at a selling price of $25,000 while incurring fixed overhead costs of $750 million per year, and variable costs of $17,000 per car. The TDI is the only model car made in a factory that cost $1.3 billion to build. Please calculate Volkswagen's expected:

A) Annual pre tax profit from making and selling the TDI?

B) Break even point in number of TDI's Sold and in Dollars?

C) Margin of Safety?

Volkswagen marketers estimate that sales will triple if the TDI can be made both more powerful and more efficient without changing the selling price or cost structure. Engineers have stated "Yah this is possible, if we are cunning."

D) Calculate Volkswagen's pre tax profit if they are "cunning"?

E) Calculate the fixed overhead cost allocated per car under the "cunning" plan?

Can you please show the work so I can understand how to get to the answer.

Reference no: EM132083232

Questions Cloud

Pupils have access to the internet at home : In a school, 60% of pupils have access to the internet at home. A group of 8 students is chosen at random.

Discuss the impact ethics plays in policing : Discuss the impact ethics plays in policing.Is proper ethical training important, why or why not?

Write report about bega corporate governance : MAF302 - Corporate Finance Assignment - Individual Critical Analysis. John wants you to write up a report about Bega's corporate governance

Net present value is the most preferred model : Even though the Net Present Value is the most preferred model of gauging a viable investment, I am sure there are situations that the payback period

Calculate volkswagen pre tax profit : Volkswagen Company has developed a "clean diesel" car called the TDI. The TDIis slightly more powerful and fuel efficient than its competitors.

How much depreciation exprense should vorst : Vorst depreciates Asset A onthe double declining balance method. How much depreciation exprense should Vorst record in 2017 for Asset A?

How much did voorhees pay in cash dividends : Voorhees Company has stockholders' equity of $400,000 and net income of $72,000. It has a payout ratio of 18% and a return on assets of 20%.

Complete shadee budgeted income statement : Each visor requires a total of $4.00 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $1.50 each.

Examine the major benefits for an organization to use ssds : Analyze the major disadvantages and possible hazards that an organization should consider before adopting SSDs.

User Account

All Pages