Ariel Company for the manutacture of cotton clothes in Turkey sels 40% of its production in Turkey and sels 10s of its production in Arab countries, and 20% in European countries. The company is studying to find new markets for its products. The administration aims to bring its sales in Europe to 40%. In order to achieve this goal, it will have to invest heavily, In recent years, therefore, the company decided to build a new facility, The desired new location should be ether in Jordan or Tunisia. The following are the data for the estimates related to each location. Jordan Tunis Intial investment $400 5300 Estimated useful ife 10 years 10 years Annual cash inflows $1.300,000 s900,000 Annual cash outfiows so0.000 53s0,000 Annual revenues (accrual) S600.000 Annual expenses laccrual) suo0.000 S60.000 Estimated salvage value S600,000 Discount rate 125 125 Instructions (aCalculate the cash payback period for each alternative.
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- International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in Turkey is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 to shift the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to remain constant…International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in Turkey is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 for the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to remain constant…International energy drink giant Energica America's regional sales manager Will Smith investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in America is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 to shift the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to remain constant…
- Due to rising labor costs in Malaysia, Domain Computer, based in Singapore, is considering shifting part of its production facilities from Malaysia to an emerging market, Vietnam, to better integrate its supply chain in the South east Asia region. John Lawson, the CFO of the company, estimates that Domain Computer needs to invest USD735,000 to acquire an existing factory in Vietnam and another USD285,000 in renovations and installation of new machineries. The cost of training new workers is estimated to be USD310,000. He believes that the new factory will lead to an estimated USD928,000 savings in labor costs and another USD417,000 savings in logistics expenses. Required: Use cost-benefit analysis to recommend whether Domain Computer should shift parts of its production facilities from Malaysia to Vietnam. Explain your answer. You are required to write 500 to 800 words. ( Currently I have completed my Cost-benefit analysis; but I am confused as to how to use PESTLE's analysis with…Due to rising labor costs in Malaysia, Domain Computer, based in Singapore, is considering shorting part of its production facilities from Malaysia to an emerging market, Vietnam, to better integrate its supply chain in the South east Asia region. John Lawson, the CFO of the company, estimates that Domain Computer needs to invest USD735,000 to acquire an existing factory in Vietnam and another USD285,000 in renovations and installation of new machineries. The cost of training new workers is estimated to be USD310,000. Andrew believes that the new factory will lead to an estimated USD928,000 savings in labor costs and another USD417,000 savings in logistics expenses. Required: Use cost-benefit analysis to recommend whether Domain Computer should shift parts of its production facilities from Malaysia to Vietnam. Explain your answer.Border Supply Company is considering opening a plant in Vietnam, The company anticipates gross prafit of $3,500,000 from this new plant. It will cost $2,000,000 to set up the plant and $800,000 to train employees. An additional $160,000 will be spent to build relationships with the local suppliers. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much? O Benefits outweigh costs by $540,000. O Costs outweigh benefits by $540,000. O Benefits outweigh costs by $700,000. O Costs outweigh benefits by $700,000.
- Toro Company is expanding its US-based plastic molding plant as it continues to transfer work from Juarez, Mexico contractors. The plant bought a $1.1 million precision injection molding machine to make plastic parts for Toro lawn mowers, trimmers, and snow blowers. The plant expects to hire 12 people, including some engineers for the expansion. If the average loaded cost (i.e., including benefits) of each employee is $100,000 per year, determine the annual worth of the new systems over a five-year planning period at an interest rate of 10% per year. Assume a 20% salvage value for the new equipment. $-2,436,420 $-2,539,420 $-1,454,142 $-1,973,420Banana group is one of the largest MNC in the world, with more than 20 years of extensive experience in the exporting of bananas to Central Asia countries with the purpose of selling there. It wants to open a new subsidiary in Almaty which will sell exported bananas to the citizens of Almaty. They are evaluating a project (subsidiary) with the following characteristics: -Fixed capital investment includes the purchase of five refrigerators which cost 92,000 tenge each; two packaging machines 105,165 tenge per unit; two units of some equipment which is 25,000 tenge/unit; one truck 40,000 tenge; a factory of 1,000 meters square and 30,000 tenge per meter square, the factory seller will provide a ten percent discount from the total cost of factory; and some other fixed capital costs amount in 20,000 tenge. -The project has an expected five-year life. -The initial investment in net working capital is 1,500,000 tenge -The fixed capital is depreciated using straight line method -Sales are…Hans Brinker is assistant vice-president for marketing for Skagen Ice Skate Company (SIS). SIS does all of its own manufacturing in Denmark and then distributes worldwide through its sales office. World prices for foreign sales offices are set by the home office. Brinker is now setting the price list for all U.S. sales offices, and needs prices set for the coming year. The current spot rate is ?? = ???? $ = 5.6050, with a one-year forward rate of ?? = ???? $ = 5.5685. The one-year deposit rates for Danish krone and U.S. dollars are 1.5% and 1.35%, respectively. SIS’s best-selling professional figure skate, the Royal Silver Blade, is currently priced at $450 to U.S. retailers. Current inflation estimates for Denmark and the United States are both about 3%. SIS’s policy is to try to absorb about 50% of all exchange rate-induced price increases, but pass along 100% of all exchange rate price decreases if possible. The world skate business is competitive. Brinker phones you and explains…
- Suppose that Kittle Co. is a U.S. based MNC that is considering setting up a subsidiary in Singapore. Kittle would like this subsidiary to produce and sell guitars locally in Singapore, and needs assistance with capital budgeting. The duration of this project is four years, with an initial investment of S$20,000,000 (Singapore dollars). Kittle Co. managers provide you key information regarding the project. 1. The government in Singapore will tax any remitted earnings at a rate of 10.00%. 2. The subsidiary will remit all of it’s after-tax earnings back to the parent. 3. The forecasted exchange rate of the Singapore dollar over the four-year period is $0.50. 4. The salvage value is S$12,000,000, which will be paid by the Singapore government in exchange for ownership of the subsidiary after four years. 5. The required rate of return is 15.00%. Furthermore, no funds can be remitted from the subsidiary to the parent until the subsidiary is sold for the salvage value at…In addition to its Australian business, Big Red Bicycle is considering manufacturing anew range of cheaper bicycles in Indonesia. The following information is available:● The Indonesian plant has capacity to manufacture 8,000 units.● Big Red Bicycle’s strategic goal is to generate a pretax profit of $1,000,000 forthe next financial year for Indonesian operations.● Clients will pay a maximum of $500 per bicycle● Possibility exists for move to Indian plant with capacity for 10,000 units.● Market for bicycles is growing rapidly and BRB will be able to sell allunitsproduced.● Limited ability to renegotiate costs with suppliers.● Pricing and cost information is as follows. Bicycle price per unit $500 (excl. GST)Current variable costs perunit $250 Fixed costs $1,280,000 Complete the following. 1. On your response document, work out:a. how many units at current variable cost would need to be produced toachieve profit target (show calculations)b. what the variable costs per unit would need to…Suppose that Kittle Co. is a U.S. based MNC that is considering setting up a subsidiary in Singapore. Kittle would like this subsidiary to produce and sell guitars locally in Singapore, and needs assistance with capital budgeting. The duration of this project is four years, with an initial investment of S$20,000,000 (Singapore dollars). Kittle Co. managers provide you key information regarding the project. 1. The government in Singapore will tax any remitted earnings at a rate of 10.00%. 2. The subsidiary will remit all of it’s after-tax earnings back to the parent. 3. The forecasted exchange rate of the Singapore dollar over the four-year period is $0.50. 4. The salvage value is S$12,000,000, which will be paid by the Singapore government in exchange for ownership of the subsidiary after four years. 5. The required rate of return is 15.00%. Furthermore, no funds can be remitted from the subsidiary to the parent until the subsidiary is sold for the salvage value at the…