What does the sales volume need to drop

Assignment Help Accounting Basics
Reference no: EM133060188

Question - Pinder Ltd is considering building a toy factory for $423,314. It is a five-year project, after which the disposal costs will cancel out the salvage value from the factory. During each of the five years, Pinder Ltd estimates sales volume to be 32,378 units, selling price to be $30, variable cost to be $8, and fixed costs to be $126,937. Pinder Ltd's required rate of return is 10%. Pinder Ltd is concerned about a potential drop in sales volume impacting investment returns. Assume cash flows occur at the end of each year, except for initial cash flows. Based only on the information above, what does the sales volume need to drop to before NPV of the project becomes zero?

Reference no: EM133060188

Questions Cloud

Statement regarding option taxation : Which of the following is a correct statement regarding option taxation?
Facing intelligence agencies in united states : What are the biggest challenges that you see facing intelligence agencies in the United States today?
Investment in net working capital : Martin Enterprises needs someone to supply it with 122,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and y
What is rhye debt ratio : What is Rhye's debt ratio, or the proportion of debt relative to the company's total capital, the latter defined as the sum of debt and equity?
What does the sales volume need to drop : Pinder Ltd is considering building a toy factory for $423,314. What does the sales volume need to drop to before NPV of the project becomes zero
Retrieved from university library databases : Acceptable sources include relevant government websites and peer-reviewed academic journal articles retrieved from the university library databases.
Characteristics and differences personal investment : Describe the following theme characteristics and differences Personal Investment
Correlation between the two funds : The correlation between the two funds is 0.18. What investment on the debt fund will produce the lowest possible variance among all portfolios?
Prepare a multiple step income statement : Sunland Company reported the following condensed data operating expenses $722,000, Prepare a multiple step income statement

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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