Based on the information below, please conduct a break even analysis Startup Costs License: $1,500 Permits: $1,000 Rental lease costs (rent advance/deposit): $25,000 Equipment/Capital Costs Purchase of business: $100,000 Start-up capital: $100,000 Food equipment: $150,000 Computer equipment: $5,000 Computer software: $25,000 Insurances: $30.000 Uniforms: $2,000 PPE: $3,000 Phones: $4,500 Flyers/Business Cards: $500 Total: $63,000 Security system: $6,000 Total: $390,500

Based on the information below, please conduct a break even analysis Startup Costs License: $1,500 Permits: $1,000 Rental lease costs (rent advance/deposit): $25,000 Equipment/Capital Costs Purchase of business: $100,000 Start-up capital: $100,000 Food equipment: $150,000 Computer equipment: $5,000 Computer software: $25,000 Insurances: $30.000 Uniforms: $2,000 PPE: $3,000 Phones: $4,500 Flyers/Business Cards: $500 Total: $63,000 Security system: $6,000 Total: $390,500

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Should WLW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 360,000Taxes, insurance, and repairs (per year)$ 34,000Intended years of use20Projected market value in 20 years$ 1,600,000Maximum down payment WLW can make$ 500,000Remainder in four payments of;$ 160,000Revenue opportunityBuilding annex will be leased to a tenant and will generate a lease revenue (per year) for 10 years$60,000Option 2: LeaseIntended years of use20First lease payment due now$ 90,000Rest of the lease payments (years 2-20)$ 90,000Operating costs to be paid by WLWRepairs (annual)$ 9,000Maintenance (annual)$ 26,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the preferred option (construction or leasing).
RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: a. Rate of Return Method Rate of Return Method Annual Cost Method NOTE: Show cashflow diagram.
Objective: Should WAW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 230,000Taxes, insurance, and repairs (per year)$ 30,000Intended years of use20Projected market value in 20 years$ 1,600,000Maximum down payment WAW can make$ 500,000Remainder in four payments of;$ 180,000Option 2: LeaseIntended years of use20First lease payment due now$ 100,000Rest of the lease payments (years 2-20)$ 90,000Operating costs to be paid by WAWRepairs (annual)$ 7,000Maintenance (annual)$ 25,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the preferred option (construction or leasing).
A firm is trying to decide between two equipment for a production activity. The following information is available. Equip 1 Equip 2 Initial investment $25,000 $17,000 7 years 7 years $0 Useful life Salvage value Operating cost per hour $0 $4.30 $5.00 At a MARR of 8% per year, determine the breakeven number of operating hours per year. Click the icon to view the interest and annuity table for discrete compounding when i = 8% per year. The breakeven number of operating hours per year is O A. 1,866 O B. 2,195 O C. 1,756
In an energy systems installation, following financial requirement was identified. Capital cost of equipment and installation - $ 150,000 Recurrent cost of maintenance Replacement of parts Life time of the system Income through energy generation i. iii. -$5,000 per year -$4,000 per year - 12 years - $ 22,000 per year Calculate the payback period of the system. If the scarp value of the equipment is $ 5,000, determine is the net profit expected to be collected for the investment? Explain how this profit is affected by "cost of money" or "interest". No calculations needed.
a- At 10%, find PW for the following Table Warehouse cost equipment cost Installation cost Annual maintenance costs Annual Revenues Salvage Machine life 0 1 2 3 -90,000 b- A project with an IRR = 20%, it has the following NCF (S) X X 4000 (SUS) 50,000 46.000 Find X? 6,500 8,000 45,000 15,000 15 years
Evaluate the following project using PW method. The MARR is set to 12% per year Initial Investment - 13,000 Useful Life - 15 yrs Annual Operating Expenses - 1000 Overhaul cost EOY 5 - 200 Overhaul cost EOY 10 - 550
You have been tasked to conduct a conventional B/C analysis for a security system upgrade at your organization. Using a discount rate of 9% p.a. and the data provided below, determine if the project is justified. Item Cash Flow First cost, $ 25,000 AW of benefits, $/year 3,800 FW of disbenefits, year 20, $ 6,750 O&M costs, $/year 400 Life, years 20
Establishment of a new lab requires an initial investment of $240,000 and annual costs of $85,000 for ever. What is the capitalized cost of this lab investment given an annual interest rate of 4%? OA. $2,365,000 OB. $2,134,600 OC. $2,125,000 OD. $2,322,925 OE. $1,885,000 GEECH
The following is a cost / revenue estimates of a project: Initial investment $50,000 Annual revenue 20,000 Annual operating cost 2,500.. Salvage value@EOY 10,000 Study period 5 years MARR 20% per year Determine whether the project is profitable using the PW method .
A concrete vibrating equipment will be purchased for a cost of $107,425. After a useful life of 5 years it is assumed the equipment will be sold for $33,450. Assume interest of 7.5% for borrowing money, 4.3% for risk, and 2.2% as the equivalent interest rate fortaxes, insurance, and storage, Calculate the annual ownership cost and the cost per hour assuming the equipment will be used 1920 hr. /yr.
Using the following two relationships: AW = CR + A of AOC CR = -P(A/P,i,n) + S(A/F,i,n) %3D Calculate the Annual Worth (AW) based on the data for the following project: Corporate MARR = 10% Initial Investment Cost $1,000,000 Anticipated Project Life = 10 years Salvage Value at the end of 10 years $100,000 Annual Cost of Operation %3D $50,000 10% Compound Interest Factors

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