Depreciation on the equipment to produce the new board

Assignment Help Financial Management

Reference no: EM13913262

Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $25,800, and the company expects to sell 1,430 per year. The company currently sells 1,930 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,750 units per year. The old board retails for $21,700. Variable costs are 54 percent of sales, depreciation on the equipment to produce the new board will be $1,380,000 per year, and fixed costs are $1,280,000 per year.

If the tax rate is 34 percent, what is the annual OCF for the project?

Reference no: EM13913262

Questions Cloud

What makes zipcar an attractive employer for which to work : What makes Zipcar an attractive employer for which to work? What do those doing the actual hiring at Zipcar feel are important characteristics to find in potential employees

Create a tables student that print names of students : Create the following tables: student (sid, sname, sex, age, year, gpa) that Print the names of the students with the lowest GPA.

The following information is from abc company : The following information is from ABC Company's general ledger: Beginning and ending inventories, respectively, for raw materials were $8,000 and $10,000 and for work in process were $20,000 and $22,000.

Discounted payback period for the investment project : What is the discounted payback period for the investment project that has the following cash flows, if the discount rate is 14 percent?

Depreciation on the equipment to produce the new board : Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $25,800, and the company expects to sell 1,430 per year. The company currently sells 1,930 units of its existing model per year..

The following cost behavior patterns describe anticipated : The following cost behavior patterns describe anticipated manufacturing costs for 2013: raw material, $7/unit; direct labor, $10/unit; and manufacturing overhead, $240,000 + $8/unit.

Compute the NPV statistic for Project : Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent.

Leadership involves embarking on an inward and outward : Leadership does not begin with the skills for moving others to action. Instead, leadership involves embarking on an " inward and outward journey of self-reflection," which inspires others to action. (Arkoubi, 2013, p. 3).

Computer-based order entry system-one-time reduction : Your firm is contemplating the purchase of a new $570,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $58,000 at the end of that time. You will save $270,000 before..

User Account

All Pages