Determine the sensitivity of the breakeven point in changes

Assignment Help Financial Management

Reference no: EM131504927

A manufacturing company is considering installing a heat recovery system to help offset their energy cost for heating.

- The investment cost is $150,000

- The estimated energy cost savings is 38% with the heat recovery system

- The current energy cost for heating is $5,000 per mont

- The current government subsity for this kind fo energy conservation investment is 25% (meaning the company's effective investment cost is reduced by 25%)

- The company's interest rate is 3%

Determine the sensitivity of the breakeven point in changes to the following:

-Changes in the government subsity down to 0% and up to 50%

-Changes in the company's interest rate down to 2% and up to 6%

-Changes in energy saving +/- 25%

Reference no: EM131504927

Questions Cloud

Describe concerns with properly controlling the given flow : Describe concerns with properly controlling this flow, including keeping it safe from unauthorized use.

Do you drink tap water or bottled water : Do you drink tap water or bottled water? How much?When you flush the toilet do you know where the wastewater goes?

Behavior and thinking patterns of us culture : How do the behavior and thinking patterns of U.S. culture apply to each group, especially regarding class systems and employment?

Statements best describes the revenue cycle : Which of the following statements best describes the revenue cycle?

Determine the sensitivity of the breakeven point in changes : Determine the sensitivity of the breakeven point in changes to the following:

Create a diagram using microsoft visio that lists it systems : Create a diagram using Microsoft Visio that lists the IT systems you identified. What changes the system brought to the business world?

What is the separation of spectral lines : From the value 2940.8 cm-1 for the reciprocal wavelength equivalent to the fundamental vibration of a molecule C12, What is the separation of spectral lines

Have you ever had foodborne illness : Have you ever had foodborne illness? What do you think caused it?Of the foodborne pathogens what is the most common and why?

Draw the long-run average and marginal cost curves : United Widgets plc has a production function which displays increasing returns in the output range from zero to X1, constant returns from X1 to X2.

User Account

All Pages