Perform breakeven analysis

Assignment Help Financial Management
Reference no: EM131487650

There are two electric motors that can provide 100 hp. Alpha motor can be purchased at $1,400 and has an efficiency of 80%, an estimated life of 10 years, and estimated maintenance costs of $50/year. Beta Motor will cost $1,000 and has an efficiency of 90%, life of 10 years and maintenance cost of $25/year. Assume that the company internal rate of return is 15%. Perform a Breakeven analysis to find out at what hours of operations the two motor costs are the same. Assume an electricity rate of $0.05 per kilowatt hour. Please plot your results.

Reference no: EM131487650

Questions Cloud

Bonuses over the years in the form of shares in corporation : Burt is the custodian at Quaker Inn, an S corporation that has paid him bonuses over the years in the form of shares in the corporation.
The risk premium on spanish government bonds : What should this do to the risk premium on Spanish government bonds?
What is pharmecologys current stock price : Pharmecology just paid an annual dividend of $1.55 per share. What is Pharmecology’s current stock price?
What were arringtons total liabilities : At year-end 2016, total assets for Arrington Inc. were $1.3 million and accounts payable were $365,000. What were Arrington's total liabilities in 2016?
Perform breakeven analysis : Perform a Breakeven analysis to find out at what hours of operations the two motor costs are the same.
The company achieve without having to raise funds externally : How large of a sales increase can the company achieve without having to raise funds externally?
What does a negative interest rate mean : What does a negative interest rate mean? What is the primary difference between direct and indirect finance?
What is the projects initial investment outlay : Leaf It To Us Corporation is considering an expansion project. What is the project’s initial investment outlay?
What is california retailing addition to retained earnings : What is California Retailing's "Addition to Retained Earnings"?

Reviews

Write a Review

Financial Management Questions & Answers

  What other factor is affected by increased economic growth

What other factor is likely to be affected by increased economic growth and could place upward pressure on the value of the local currency?

  What amount of new investment income

Crappola Hospital outside of Outback, UT has been thinking about changing its’ payroll period from a bi weekly to a monthly. The administrator, Baskitcase says they currently have 600 employees with an annual payroll of $18 million. what amount of ne..

  The connection between accomplices

The connection between accomplices was bad. They chose to disintegrate the firm on 31st March, 2011. The benefits were sold which acknowledged Rs. 75,000. There were loan bosses to the degree of Rs. 12,000 which were paid off at a rebate of 5%.

  Compute tin-macaulay duration

Consider a 15-year mortage with annual installments. The effective annual rate of interest is 6%. Compute tin- Macaulay duration if the mortgage is prepaid immediately after the third regular payment in made.

  Calculate cash flow for jelly fences

What was the profit for the year and the operating cash flows for Outback Fences if the tax rate is 30%?- Calculate Cash-flow for Jelly Fences for the year 2016.

  What is the bond''s after-tax yield

An investor recently purchased a corporate bond which yields 10.5%. The investor is in the 36% combined federal and state tax bracket. What is the bond's after-tax yield? Corporate bonds issued by Johnson Corporation currently yield 11%. Municipal bo..

  Reaction to announcements of massive layoffs

Critically evaluate the following statement: “In recent years, it has been common for companies to experience significant stock price changes in reaction to announcements of massive layoffs. Critics charge that such events encourage companies to fire..

  Determine its cost of debt and the cost of equity capital

Christopher William, president of William Industries which produces widgets, has hired you to determine its cost of debt and the cost of equity capital. The stock currently sells for $25 per share and the dividend will be $5. Christopher argues that ..

  Considering leasing new robotic milling control system

Your firm is considering leasing a new robotic milling control system. The lease lasts for 5 years. The lease calls for 6 payments of $300,000 per year with the first payment occurring at lease inception. The system would cost $1,050,000 to buy and w..

  What must be the discount rate

A stock sells for $50. The next dividend will be $5 per share. If the rate of return earned on reinvested funds is a constant 15% and the company reinvests 20% of earnings in the firm, what must be the discount rate?

  Both techniques and given the capital rationing amount

Galaxy Satellite Co. is attempting to select the best group of independent projects competing for the firm's fixed capital budget of $10,000,000. Any unused portion of this budget will earn less than its 20 percent cost of capital. Which projects sho..

  In tax less world with no brokerage coasts

In a tax less world with no brokerage coasts, repurchases and dividends have the same effect on shareholder wealth. In the real world, however, repurchases provide more preferable tax treatment than dividends to ordinary investors. Is it necessary fo..

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