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- A company's invested capital is $13,000,000 and management has determined that the target rate of return on investment is 10%. Last year, the company produced 121,313 units and this year expects to units sales to be 10% above last year. The cost of the product is estimated to be $13 per unit. What is the target operating income per unit? (Round any intermediary calculations to the nearest unit and your final answer to the nearest cent.) a. $9.74 b. $9.00 c. $8.31 d. $8.99Macquarium Inc. provides computer-related services to its dients. Its two primary services are Web page design (WPD) and Internet consulting services (ICS). Assume that Macquarium's management expects to earn a 35% annual return on the assets invested. Macquarium has invested $5.4 million since its opening. The annual costs for the coming year are expected to be as follows: Variable Costs Fixed Costs Consulting support Sales and administration $225,000 $1,575,000 135,000 765,000 The two services expend about equal costs per hour, and the predicted hours for the coming year are 15,000 for WPD and 25,000 for ICS. Required a. If markup is based on variable costs, how much revenue must each service generate to provide the profit expected by corporate headquarters? What is the anticipated revenue per hour for each service? Hint: Start by determining the markup rate. WPD $ Total Revenue Reveue per Hour ICS S b. If the markup is based on total costs, how much revenue must each service…A firm has the capacity to produce 599,374 units of a product each year. At present, it is operating at 21 percent of capacity. The firm's annual revenue is $1,054,613. Annual fixed costs are $346,003 and the variable costs are $.51 cents per unit. The following equations will be useful. Profit = Revenue - Costs Revenue = Price each * quantity Costs = Fixed Cost + Variable Costs Variable Cost = Variable Cost per unit * number of units At the break even point, Profit = 0 What is the price for each unit?
- A firm has the capacity to produce 931,498 units of a product each year. At present, it is operating at 48 percent of capacity. The firm's annual revenue is $689,916. Annual fixed costs are $505,799 and the variable costs are $.45 cents per unit. The following equations will be useful. Profit = Revenue - Costs Revenue = Price each * quantity Costs = Fixed Cost + Variable Costs Variable Cost = Variable Cost per unit * number of units At the break even point, Profit = 0 At what volume of sales does the firm break even?Suppose a firm produces tires using 1000000 worth of equipment that it owns, 200 workers that are each paid $3000 per month, and $300000 in raw materials per month. a. What is this firm's capital stock? b. What is this firm's variable cost of production per month?Harrison Co. expects to sell 200,000 units of its product next year, which would generate total sales of $17 million. Management predicts that pretax net income for next year will be $1,250,000 and that the contribution margin per unit will be $25. Use this information to compute next year’s total expected (a) variable costs and (b) fixed costs.
- Q1a)The company specializes in office multi-media systems and can produce at most 820 units per month. Its current monthly production variables are a fixed cost of $55,000, a constant average variable cost of $2, 255 per unit, and a selling price of $2, 500 per unit. What is the maximum monthly profit for the company? b)As an staff at company, you are considering two projects which project A has an initial investment of $100,000 and yearly revenue of $17, 600 for 10 years, and Project B has an initial investment of $51,000 and yearly revenue of $10, 100 for 10 years. What is the point of indifference? Which project would you accept at a WACC of 16.0%? a) Point of indifference does not exist, accept project B b)Point of indifference at 8.60%, accept both Project A and Project B c) Point of indifference at 8.60%, don't accept Project A and don't accept ProjectB d) Point of indifference at 14.84%, accept Project B. e) Point of indifference at 11.86%, accept Project B f)Point of…NUBD is evaluating its X Division, an investment center. The division has a P50,000 controllable margin and P300,000 of sales. How much will NUBD’s average operating assets be when its return on investment is 10%?The selling of a product has been set at $300 per unit , and at that price the company expects to sell 1,000 units per year. The company requires a return of 20% p.a . On its investment of $ 1,250,000 in the product . What is the target cost per unit ?
- Tanner is CEO of Jones Aerospace. The firm manufactures titanium screws utilized on spacecraft. The firm charges $72.00 per unit for screws that cost the firm $25.20 per unit to manufacture; the firm manufactures 26,400 units. The firm has 927,000 in fixed costs per year. Given this information, calculate the following: D: What is the firm's Breakeven point (in units), given Target Net Income of $420,000? E: What is the firm's Margin of Safety, given its current unit volume? F: What is the firm's Margin of Safety Percentage, given the above information? G: What is the firm's Degree of Operating Leverage (DOL), given the above information? H: If the firm's revenue increases by 22%, what is the predicted percentage change in Net Operating Income, given its DOL? INSTRUCTIONS: Write dollar amounts out to the penny, with no dollar sign: 1000.00. All interest rates should be entered as follows: 11.28 (no percent sign). Show Degree of Operating…QUESTION IS IN IMAGE Your company has been doing well, reaching $1.09 million in earnings, and is considering launching a new product. Designing the new product has already cost $513,000. The company estimates that it will sell 814,000 units per year for $2.99 per unit and variable non-labor costs will be $1.03 per unit. Production will end after year 3. New equipment costing$1.12 million will be required. The equipment will be depreciated to zero using the 7-year MACRS schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $301,000. The new product will require the working capital to increase to a level of $381,000 immediately, then to $400,000 in year 1, in year 2 the level will be $354,000, and finally in year 3 the level will return to$301,000. Your tax rate is 21%. The discount rate for this project is 9.8%. Do the capital budgeting analysis for this project and calculate its NPV.Note: Assume that the equipment is put…Consider a factory that produces gear boxes at the annual rate of 12,000. Demand for the gear boxes is 7200 per year. It costs the factory $100,000 for each run, and the holding cost per gear box per year is $500. Compute the factory's optimal average inventory. Round your answer to the nearest whole number.