Charge per unit to breakeven on investment

Assignment Help Financial Management
Reference no: EM131572808

Mira Manufacturing invested in a new manufacturing line to increase competitiveness. The initial cost of the line was $265567. The costs to run the line are projected to be $176302, increasing by 12% each subsequent year. To remain competitive, the line will require a substantial overhaul of $48253 at the end of year 7. The line is estimated to have a lifespan of 12 years.

Mira projects it will sell 89802 units the first year, with the number of units sold increasing by 35935 units each subsequent year. What is the minimum price that Mira must charge per unit to breakeven on the investment? Use a MARR of 5% compounded annually to make the calculation.

Reference no: EM131572808

Questions Cloud

What is the expected return on stock : The risk premium for exposure to aluminum commodity prices is 4%, If the risk-free rate is 4%, what is the expected return on this stock?
What is the value of share of summit systems stock : What is the value of a share of Summit Systems stock based on the original expected dividend growth of 7.0% per year?
What is the annual worth of this investment : The company will receive the payments for 12 years. What is the annual worth of this investment?
What can the maximum expense per hour of the green hunger : What can the maximum expense per hour of the Green Hunger be to make it equivalent in cost to the Lawn Chomper?
Charge per unit to breakeven on investment : What is the minimum price that Mira must charge per unit to breakeven on the investment?
What is the total return of tips in percentage : What is the total return of the TIPS in dollars? What is the total return of the TIPS in percentage?
Based on your estimate of the dividend growth? rate : If Cola Co's equity cost of capital is 8.1%?, what share price would you expect based on your estimate of the dividend growth? rate?
Depreciated by the straight-line method : The soufflé maker has an economic life of five years and will be fully depreciated by the straight-line method.
Usually sell mortgages they originate in secondary market : Why do Savings & Loan Associations usually sell the mortgages they originate in the secondary market?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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