This paper circulates around the core theme of Compute the NPV using the information above. (SHOW ALL WORK).Compute the financial break-even quantity, i.e., the minimum number of units required to justify investment. (SHOW YOUR WORK, AND BRIEFLY DESCRIBE HOW YOU OBTAINED THE ANSWER.) together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
The Flying Toaster Appliance Company is considering a new project.
The equipment will cost $30,000, have a six-year life, and be
depreciated to a zero salvage value. The tax rate is 40% and the
appropriate discount rate is 12%. Fixed costs for additional salaries,
utilities, and miscellaneous expenses are expected to be $20,000 per
year. Variable costs for each unit are expected to be $40, and the unit
price is $60. The expected sales quantity is 1,600 units per year.
(a) Compute the NPV using the information above. (8 points) (SHOW ALL WORK)
(b) Compute the financial break-even quantity, i.e., the minimum
number of units required to justify investment. (SHOW YOUR WORK, AND
BRIEFLY DESCRIBE HOW YOU OBTAINED THE ANSWER.) (2 points)
· financial break-even quantity =
· brief description of solution:
(c) Compute the best-case and worst-case NPV, assuming the variable
cost, fixed cost (except for depreciation), and sales price can all
fluctuate up or down by 10% (independent of each other). (SHOW YOUR
WORK, AND BRIEFLY DESCRIBE HOW YOU OBTAINED THE ANSWER.) (4 points)
· best-case NPV = _______________
· worst-case NPV = _______________
· brief description of solution:
