Determine what is the new projection for profits

Assignment Help Financial Econometrics
Reference no: EM13334863

Assume your marketing people have a great plan to boost the unit sales. Unit sales rise to 500,000, but the plan requires your firm to drop the price to $29,000/unit and the marketing will cost your firm $300 million total. This $300 million is on top of the firm's original $5 billion fixed costs. Your firm still has $18,000 variable cost per unit. Your initial projection for profits before the marketing plan was to break even ($0 profits). What is your new projection for profits?

Reference no: EM13334863

Questions Cloud

Explain what is the value of q and the reaction quotient : For the setup in the above question, what is the value of Q, the reaction quotient, for this cell reaction at 25oC. 2Cr(s) + 3Br2(aq) --> 6Br-(aq) + 2Cr3+(aq)
What is the premium added to the unlevered cost of equity : Assume the WACC for a firm if it was unlevered is 8%, beta unlevered is 1.0, the market return is 8%, and the risk free rate is 2%. Also assume that the firm has $100 in debt and $100 in equity and that its tax rate is 40%.
Calculate the mass of the piece of fruit : A hardworking ant must supply 0.00655 N to pull a small piece of fruit at constant velocity over a distance of 8.00 cm up a small hill to the entrance of the colony. Use the work-energy theorem to calculate the mass of the piece of fruit in grams
Evaluate the frequency of oscillation : A 0.25-kilogram mass on a vertical spring oscillates at a frequency of 1.0 Hz. If a 0.45-kilogram mass were instead suspended from the same spring, what would be the frequency of oscillation
Determine what is the new projection for profits : Assume your marketing people have a great plan to boost the unit sales. Unit sales rise to 500,000, but the plan requires your firm to drop the price to $29,000/unit and the marketing will cost your firm $300 million total.
Determine how many cars must the firm sell to break even : Assume your firm is an auto manufacturer. Its fixed cost for a certain type of car is $5 billion. The variable cost per unit is $18,000, and you sell the car for $30,000.
Determine the period of oscillation : A block of mass 0.379 kg is placed on the end of a spring which has a stiffness of 216 N/m. It is pulled down 4.40 cm and released. What is the period of oscillation
Determine what is stocks value per share at constant rate : Smith Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constant rate of 8% per year indefinitely. Smith has no debt or preferred stock, and its WACC is 11%.
Describe the situation facing mensa at the time : Describe the situation facing Mensa at the time of the case. This should include the major issues facing the company and the decisions that need to be made. You are to spend no time on corporate history. You must consider the past, but your analysis ..

Reviews

Write a Review

Financial Econometrics Questions & Answers

  Determine the operationg cash flow for the current year

A firm in the third year of depreciating its only asset, which originally cost $180,000 and has a 5-year MACRS recovery period, has gathered the following data relative to the current year s operations.

  What is the firms cost of preferred stock, and common stock

The firm recently paid a dividend of $2 per share of common stock, and the investors expect the divid end to grow indefinitely at a constant rate of 10 percent per year. The common stock of Ross is currently selling at $40.

  By how much can sales revenue drop before werth incurs loss

Werth Company produces tie racks. The estimated fixed costs for the year are $288,000, and the estimated variable costs per unit are $14. Werth expects to produce and sell 60,000 units at a price of $20 per unit.

  Calculate the net present value for the original transaction

Firm H has the opportunity to engage in a transaction that will generate $100,000 of cash flow (and taxable income) in year 0. How does the net present value of the transaction change if the firm could restructure the transaction

  How much will you have in account for 10years from now

Your annual savings of $12,225 are deposited into Account # 3, which earns you 8.39% compounded quarterly for 5 years. How much will you have in Account #3 10 years from now

  Determine what is the stocks expected return

A stock has a 50% chance of producing a 20% return, a 25% chance of producing a 10% return, and a 25% chance of producing a -10% return. What is the stock's expected return

  Determine what must the coupon rate be on the bonds

Page Enterprises has bonds on the market making annual payments, with ten years to maturity, and selling for $968. At this price, the bonds yield 6.90 percent. What must the coupon rate be on the bonds

  Determine what amount must friend deposit annually

Your friend intends to invest her money in the local credit union, which offers 7.9 percent interest per year. She wants to make equal annual payments on each birthday into the account established at the credit union for her retirement fund.

  How much charlie invest today in order to have retirement

charlie wants to retire in 15 years, and he wants to have an annuity of $50,000 a year for 20 years after retirement. charlie wants to receive the first annuity payment the day he retirees.

  Determine what is beas unlevered beta before restructuring

Beckman Engineering and Associates (BEA) is considering a change in its capital structure. BEA currently has $20 million in debt carrying a rate of 7%, and its stock price is $40 per share with 2 million shares outstanding.

  Calculate npv-irr-mirr-payback and discounted payback

A Firm with a 14% WACC is evaluating two projects for this year's capital budget. After tax cash flows, including depreciation are as follows; Project A; -6,000 , 2,000, 2,000, 2,000, 2,000, 2,000

  Determine what is the times-interest-earned-tie ratio

Graser Trucking has $20 billion in assets, and its tax rate is 30%. Its basic earning power (BEP) ratio is 13%, and its return on assets (ROA) is 3%. What is its times-interest-earned (TIE) ratio

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd