What is the total incremental cash flow for project

Assignment Help Financial Management
Reference no: EM131551431

Project B will result in unit sales of 1,500, at a price of $500 each. The variable cost (VC) of each unit is $250. The cost accountant will allocate overhead on the existing plant to Project B at a rate of $21 per unit. A special piece of equipment must be leased for $50,000 per year for purposes related solely to Project B. Project B will reduce sales of the same company’s Project A by 150 units (selling price of $800 with variable cost of $420 and overhead allocation of $32 per unit). What is the total incremental cash flow for Project B?

$231,700

$268,000

$281,700

$313,200

$318,000

Reference no: EM131551431

Questions Cloud

Determine the economic service life and corresponding aw : Determine the economic service life and corresponding AW of this challenger.
What is the operating cash flow per year : Assume a tax rate of 30% and straight-line depreciation. What is the operating cash flow per year?
What is its after-tax salvage value if equipment is actually : what is its after-tax salvage value if the equipment is actually sold after 2 years for $1,250,000?
Incremental revenue associated with discount product line : The discount line is expected to reduce sales of the expensive product line to $2,200,000. What is the incremental revenue associated with the discount product
What is the total incremental cash flow for project : What is the total incremental cash flow for Project B?
Discusses the current international pricing strategies : Find an article that discusses the current international pricing strategies of any firm from various industries.
Define covered call position construct payoff : Define covered call position Construct payoff and profit function and draw payoff diagram of covered call.
Main differences between the money market securities : Briefly describe the main differences between the following money market securities:
What is the receivables turnover and annual credit sales : Evil Pop, Inc., has an average collection period of 35 days. What is the receivables turnover? What are annual credit sales?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the price of face value bond

What is the price of a $1,000 face value bond if the quoted price is 103.1?

  Marketing communications and how to achieve brand equity

Using ideas and models found in chapter 19 of kotler and kellers, describe how your organization should change its current policy on markettiing communications and adopt ideas from the chapter to achieve true communication integration and enhanced br..

  Two different bonds currently outstanding

Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $20,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $3,000 every six months over the subsequent eight years, and ..

  What is the highest interest rate-refinance the mortgage

A homeowner took out a 30-year, fixed-rate mortgage of $310,000. The mortgage was taken out 10 years ago at a rate of 7.50 percent. If the homeowner refinances, the charges will be $2,500. What is the highest interest rate at which it would be benefi..

  Trade on the stock exchange and market risk premium

Company XYZ is expected to pay no dividends for the next 10 years (that is, up to, and including Year 10). In year 11, the company will pay a dividend of $0.75. After that, all subsequent dividends will be growing at 5.5% per year forever. Company XY..

  Does the convertible issues lower coupon rate

Suppose a company simultaneously issues $50 million of convertible bonds with a coupon rate of 10% and $50 million of straight bonds with a coupon rate of 14%. Both bonds have the same maturity. Does the convertible issue's lower coupon rate suggest ..

  Euro interest rate per year that would prevent arbitrage

Assume that the spot rate is €0.8144/$, the 180-day forward rate is €0.7933/$, and the 180-day dollar interest rate is 6 percent per year. What is the 180-day euro interest rate per year that would prevent arbitrage?

  What is the yield to maturity on the companys debt

A corporation has 20,000,000 shares of stock outstanding at a price of $50 per share. What is the yield to maturity on the company’s debt?

  Make financial sense-compact fluorescent lamps

Compact fluorescent lamps (CFLs) have become more popular in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $0.54 and lasts for 1,000 hours. If you require a 10 percent return, at what cost per..

  Considering expanding one of its production facilities

Needle and Thread Inc. is considering expanding one of its production facilities to build a new line of sewing kits. The project would require a $9,000,000 capital investment and will be fully depreciated (straight-line) over its 3 year life. Increme..

  What is the treynor ratio

A portfolio has an average return of 9.7 percent, a standard deviation of 8.6 percent, and a beta of .72. The risk-free rate is 2.1 percent. What is the Treynor ratio?

  Difference in observed net operating profit margins

The net operating profit margin is 19% for WidgetCo and 21% for Tool. Which of the following statements is the most plausible explanation of the difference in observed net operating profit margins?

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