What is the profit equation for the company

Assignment Help Financial Management
Reference no: EM131027051

Soumotchka Accessories make customized handbags to order.

The price they can charge depends on how many they sell, x, consistent with the expression:

Price (£) = 242 – 0.4x

The total cost of producing the handbags is: Cost (£) = 300 + 2x + 0.1 x2

(a) What is the profit equation for the company?

Reference no: EM131027051

Questions Cloud

Assuming they donot save any additional funds : Problem 5-3 Finding the required interest rate Your parents will retire in 26 years. They currently have $340,000, and they think they will need $2,500,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don..
The dividend yield and the capital gains yield : Suppose a stock had an initial price of $90 per share, paid a dividend of $2.40 per share during the year, and had an ending share price of $76. Compute the percentage total return. What was the dividend yield and the capital gains yield?
Expected net present value of this purchase opportunity : Stu can purchase a one-bedroom house near his college today for $110,000, including the cost of some minor repairs. He expects to be able to resell it in four years for $150,000 if he just puts a little effort into cleaning up the property. At a disc..
Identical deposit each year up to and including the year : Today is your birthday and you decide to start saving for college. You will begin college on your 18th birthday and will need $10,000 per year at the end of each of the next 4 years (after that 18th birthday - isn't it nice the college lets you pay a..
What is the profit equation for the company : Soumotchka Accessories make customized handbags to order. The price they can charge depends on how many they sell, x, consistent with the expression: What is the profit equation for the company?
Calculate the bonds default risk premium : Dakota Corporation 15-year bonds have an equilibrium rate of return of 10 percent. For all securities, the inflation risk premium is 1.75 percent and the real risk-free rate is 3.50 percent. The security’s liquidity risk premium is 1.20 percent and m..
What is the NPV and IRR of the project : Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 –$592,000 1 222,000 2 165,000 3 230,000 4 209,000 All cash flows will occur in Erewhon and are expressed in dollars...
Calculate the initial outlay and depreciable asset : A company is purchasing a new machine which will cost $130,000 with additional shipping costs of $5,000 and set up and installation costs of $12,000. An additional $8,000 in Net Working Capital will be required. Calculate the Initial Outlay (startup ..
The increment to the market value of the equity equals : Red Shoe Co. has concluded that additional equity financing will be needed to expand operations and that the needed funds will be best obtained through a rights offering. Assume that the increment to the market value of the equity equals the gross pr..

Reviews

Write a Review

Financial Management Questions & Answers

  Initial investment-double-declining balance depreciation

Initial investment: Basic calculation Cushing Corporation is considering the purchase of a new grading machine to replace the existing one. The existing machine was purchased 3 years ago at an installed cost of $20,000; it was being depreciated under..

  Explain various stages and parties to collection of check

Identify and explain the various stages and parties to the collection of a check. Discuss the methods by which liability on an instrument may be terminated

  Capital structure consists solely of debt and common equity

WACC and Percentage of Debt Financing Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at rd = 8%, and its common stock currently pays a $4.00 dividend per share (D0 = $4.00). T

  Should the company replace the old machine

If Company A is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $219,000, a 4-year expected life, and after-tax cash flows (labor savings and depreciation) o..

  Calculating cost of debt

Drogo, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 23 years to maturity that is quoted at 97 percent of face value. The issue makes semiannual payments and has an embedded cost of 5 percent annually. What..

  Net new investment in operating capital-no interest expense

Juicers Inc. is thinking of acquiring Fast Fruit Company. Juicers expects Fast Fruit's NOPAT to be $9 million the first year, with no net new investment in operating capital and no interest expense. For the second year, Fast Fruit is expected to have..

  State transactions that involve a series of equal cash flows

Determining present value, relate to compounding, as used in determining future value? How are you able to apply discounting and compounding concepts to lump sum transactions versus transactions that involve a series of equal cash flows?

  Compounded quarterly to reach your goal

Suppose you want to have a balance of $31,000 in an account in 8 years. How much money do you need to deposit quarterly if the account earns 6% compounded quarterly to reach your goal?

  Wall mart has decided to buy a chain store

Wall Mart has decided to buy a chain store in South Africa and now has an exposure to the South African Rand. How should it hedge its short term and long term foreign exchange exposures related to this transaction

  Developed a financial retirement strategy

He presently has $150,000 in a retirement account that will be re-invested in a stock fund that has historically earned 10% annually (EAR) with no dividends. The plan is to add an additional $1,000 to the fund at the end of each month for 15 years. H..

  What would be your total return on the investment

You bought a 7 percent coupon bond one year ago for $1,080.50. These bonds make annual payments and mature six years from now. Suppose you decide to sell your bond today when the required rate of return on the bond is 5.5%.If the inflation rate was 3..

  What is the present value of this buildings tax shields

A local engineering firm just bought a new office building (CCA=4%) for $500,000. Useful life of 30 years is expected with no salvage value. If tax rate is 40%, and required rate is 10%, then what is the present value of this building's tax shields?

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