Arel, which produces X Goods, plans a total investment of 5,000,000 pounds using 3,000,000 TI of equity and 2,000,000 pounds of foreign capital with 40% interest. According to the calculations, the total fixed expenses of the project is 2,800,000 pounds, while the head of the unit changes, the expenses are 500 pounds, and the estimated sales price of the product produced is 900 pounds. The capacity of the project is 25,000 units. In the face of this situation; a) what is the breakeven point that closes interest payments ? b) what is the upside point if 25% profit on equity demands labor ? c) What is the breakeven point if it wants to make a profit in the amount corresponding to 15% of the close?

Arel, which produces X Goods, plans a total investment of 5,000,000 pounds using 3,000,000 TI of equity and 2,000,000 pounds of foreign capital with 40% interest. According to the calculations, the total fixed expenses of the project is 2,800,000 pounds, while the head of the unit changes, the expenses are 500 pounds, and the estimated sales price of the product produced is 900 pounds. The capacity of the project is 25,000 units. In the face of this situation; a) what is the breakeven point that closes interest payments ? b) what is the upside point if 25% profit on equity demands labor ? c) What is the breakeven point if it wants to make a profit in the amount corresponding to 15% of the close?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 21P: Your division is considering two investment projects, each of which requires an up-front expenditure...

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