Thaler & Co are prepared to launch their new project. They expect that, once 'operational, they will sell 170,000 units at a per unit price of $13.00. They anticipate each unit will have a variable cost of $2.00. Thaler's project will incur $1,500,000 in annual depreciation expense and they plan to have other annual cash operating cost of $800,000. Thaler has a tax rate of 25%. What is Thaler's cash break-even quantity of units sold? O61,539 units O 72,728 units O 15,455 units O 136,364 units O 209,091 units

Jasmine Manufacturing is considering a project that will require an initial investment of $52,000 and is expected to generate future cash flows of $10,000 for years 1 through 3, $8,000 for years 4 and 5, and $2,000 for years 6 through 10. What is the payback period for this project?

Markoff Products is considering two competing projects, but only one will be selected. Project A requires an initial investment of $42,000 and is expected to generate future cash flows of $6,000 for each of the next 50 years. Project B requires an initial investment of $210,000 and will generate $30,000 for each of the next 10 years. If Markoff requires a payback of 8 years or less, which project should it select based on payback periods?

Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided manufacturing system. The annual net cash benefits and savings associated with the system are described as follows: The system will cost 9,000,000 and last 10 years. The companys cost of capital is 12 percent. Required: 1. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of five years or less. Would the system be acquired? 2. Calculate the NPV and IRR for the project. Should the system be purchasedeven if it does not meet the payback criterion? 3. The project manager reviewed the projected cash flows and pointed out that two items had been missed. First, the system would have a salvage value, net of any tax effects, of 1,000,000 at the end of 10 years. Second, the increased quality and delivery performance would allow the company to increase its market share by 20 percent. This would produce an additional annual net benefit of 300,000. Recalculate the payback period, NPV, and IRR given this new information. (For the IRR computation, initially ignore salvage value.) Does the decision change? Suppose that the salvage value is only half what is projected. Does this make a difference in the outcome? Does salvage value have any real bearing on the companys decision?

A company is considering the introduction of a new product line. The initial investmentrequired for this project is $620,000, and annual maintenance costs are anticipated to be$53,400. Annual operating costs will be $10.5 per unit, and each unit of product can be soldfor $76. If the MARR is 10% and the project has a life of 6 years.What is the minimum annual production level for which the project is economicallyviable

Bourque Enterprises is considering a new project. The project will generate sales of $1.6 million, $2.3 million, $2.2 million, and $1.7 million over the next four years, respectively. The fixed assets required for the project will cost $2.1 million and will be eligible for 100 percent bonus depreciation. At the end of the project, the fixed assets can be sold for $165,000. Variable costs will be 25 percent of sales and fixed costs will be $540,000 per year. The project will require NWC equal to 20 percent of sales that must be accumulated in the year prior to sales. The required return on the project is 13 and the tax rate is 24 percent. What is the NPV of the project?

Your company is considering the introduction of a new product line. The initial investment required for this project is $500,000, and annual maintenance costs are anticipated to be $45,000. Annual operating costs will be directly proportional to the level of production at $8.50 per unit, and each unit of product can be sold for $65. If the MARR is 15% and the project has a life of 5 years, what is the minimum annual production level for which the project is economically viable?

Pendant Publishing is considering a new product line that has expected sales of $1,100,000 per year for each of the next 5 years.  New equipment that is required to produce the new product will cost $1,200,000.  The equipment has a useful life of 5 years and a $300,000 salvage value and will be sold at the end of year 5 for its’ salvage value. Total variable costs of the product line are $450,000 per year, total fixed costs (not including depreciation) will be an additional $180,000 per year and the initial working capital investment, to buy inventory, will be $15,000. The discount rate (interest rate) for the project is 10% and the company’s tax rate is 35%.  What is the operating cash flow of year 1 for the company? $305,500 $368,500 $470,000 ($846,500)

A company is considering a project which would involve purchasing amachine for $20,000 which will have no value at the end of the project.It will be used to produce a product which will have sales of 600 unitsper year for 4 years. The sales price per unit will be $50, the variablecosts per unit $20 and the incremental fixed costs of the project will be$10,000 per annum. These are all expressed in real terms and will besubject to inflation.Sales will inflate at 5% per annum, variable costs at 6% per annumand fixed costs at 7% per annum.The cost of capital is 15%Required:-Calculate NPV of the project

You are evaluating a product for your company. You estimate the sales price of product to be $150 per unit and sales volume to be 10,500 units in year 1; 25,500 units in year 2; and 5,500 units in year 3. The project has a 3 year life. Variable costs amount to $75 per unit and fixed costs are $205,000 per year. The project requires an initial investment of $339,000 in assets which will be depreciated straight-line to zero over the 3 year project life. The actual market value of these assets at the end of year 3 is expected to be $45,000. NWC requirements at the beginning of each year will be approximately 15% of the projected sales during the coming year. The tax rate is 21% and the required return on the project is 12%. What will the year 2 free cash flow for this project be?   Multiple Choice A. $922,655 B. $1,372,655 C. $1,594,500 D. $1,259,655