During a slack period, a manufacturer can sell 3000 articles per month at a price of $1.20 each. A $200,000 investment is used which is depreciated over a 20-year life. An annual fixed cost of $20,000 myst be considered well as an annual maintenance cost of $10,000. The production cost is $1.10 per item. The manufacturer's tax rate is 45%. Should the factory shut down?
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During a slack period, a manufacturer can sell 3000 articles per month at a price of $1.20 each. A $200,000 investment is used which is
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- The ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. How many units must ABC sell each month to break even?A company that manufactures automatic blowdown control valves (for applications where boilers are operated unsupervised for 24 to 36 hours) has fixed cost of $160,000 per year and variable cost of $400 per valve. If the company expects to sell 12,000 valves per year, determine the selling price in order for the company to (a) break even, and (b) make a profit of $400,000 per year.A firm is charged P150 per ton for hauling its raw materials by a trucking company. Forty tons per day are hauled for 300 days a year. It is a desired to install a railway system which would bring down the cost of,hauling to P6.60 per ton. Maintenance cost of this is P12,000 per month. Tax is 1%. Average rate of earning is 20%. (a) If the company has the cash necessary for the installation would you recommend the change?(b) If the company has to float P5,000,000 worth of non callable bonds at 15% that will mature in 10 years to have the capital. for the project, would you recommend the change? Ans. (a) Rate of return is 26,68%. investment is justified.(b) Rate of return is 10.61% investment is not justified.
- Acme Inc. has invested $50,000 in a new assembly line. Products produced by the new assembly line are sold for $100 per unit. Fixed annual costs are $10,000 while variable annual costs are $10 per unit. The assembly line will remain in operation for 10 years, after which it will be sold for $15,000. The company has a MARR of 15%. What is the minimum annual production volume required to generate a profit?A steel drum manufacturer incurs a yearly fixed operating cost of 200000. Each drum manufactured costs 160 to produce and sells for 200. what is the manufacturer's break even sales volume in drums per year?A company can automate its payroll department by purchasing a computer. The computer costs $25,000 now, but it may cost only $20,000 next year. The company expects to save $6500 a year during its useful life of 5 years. The discount rate is 12%, and the risk-free rate is 6%. The company uses straight-line depreciation and its tax rate is 30%. Should the company install the computer this year, or next year?
- The ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. Suppose that ABC would like to realize a monthly profit of $50,000. How many units must they sell each month to realize this profit?A manager has determined that a potential new product can be sold at a price of $50 each. The cost to produce the product is $35, but the equipment necessary for production must be leased for $100,000 per year. What is the break-even point? (Round your answer to the nearest whole number.)The ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. What is ABC's monthly break-even amount in dollars?
- Wrangler Western has some of its jeans stone-washed under a contract with an independent contractor, Almos Garment Corp. If Almos' operating cost is $38,000 per year for years 1 and 2 and then it increases by 5% per year through year 10, what is the year-zero present worth of the machine operating cost at an interest rate of 14% per year? The present worth of the machine operating cost is determined to be $The company sales price is $35 per unit. The variable cost of production bowties is $21 per unit. The company expect to have fixed cost of $70000 next year. The company expect to sell 8,800 bowties next year. Assume no tax Calculate the breakeven point in dollars:FLY corporation manufactures stamp pad that sells for Php 65.00 each. It costs FLY corporation Php 35,000.00 per year to operate its plant. The sum includes rent, depreciation charges on equipment, and salary payments. If the cost to produce one stamp pad is Php 50.00, how many stamp pad must be sold each year for FLY to avoid taking a loss