Calculate most profitable investment, Financial Management

TC  Shipping Ltd has decided to purchase a machine to augment the company's installed capacity to meet the growing demand for its products. There are three machines under consideration of the management. The relevant details including estimated yearly expenditure and sales are given below: All Sales are on cash. Corporate income tax rate is 40%. Interest on Capital may be assumed to be 10%.

Particulars

Machine 1

Machine 2

Machine 3

Initial Investment Required

3,00000

3,00000

3,00000

Estimated Annual Sales

5,00,000

4,00,000

4,50,000

Cost of Production(Estimated):

 

 

 

Direct Materials

40,000

50,000

48,000

Direct Labor

50,000

30,000

36,000

Factory overheads

60,000

50,000

58,000

Administration costs

20,000

50,000

'15,000

Selling and Distribution Costs

10,000

10,000

10,000

The economics life of Machine 1 is 2 years, while it is 3 years for the other two. The scrap values are Rs.40, 000, Rs. 25,000, and Rs.30, 000 respectively. Suggest the most profitable investment based on various project appraisal techniques.

 

 

Posted Date: 3/9/2013 2:30:05 AM | Location : United States







Related Discussions:- Calculate most profitable investment, Assignment Help, Ask Question on Calculate most profitable investment, Get Answer, Expert's Help, Calculate most profitable investment Discussions

Write discussion on Calculate most profitable investment
Your posts are moderated
Related Questions
Hi'' can you tel me a how you describe what is a company las or an example. Thanks iulia


List the benefits of the flexible exchange rate regime. Answer:  The benefits of the flexible exchange rate system include: a) Automatic attainment of balance of payments eq

what is mean by breakeven point

Question 1: Give an account of the role of governmental bodies and officials in the making of public policies. Question 2: What do you understand by the term "Governmen

A c quisition Planning and Strategy In the previous section, we discussed about the constraints to successful merger integration. In this section, we will learn how to plan a

Brown has been in business for some years and has kept her drawings slightly below the level of profits each year. You are her accountant, and she has passed you the following list

E v aluation of  bids and determination of the lowest  evaluated responsive and qualified bidder You learnt how to receive and open bids in the previous sub section. Here you

Partial Income Statement Year Ending 2011 Sales Revenue                $350,000 COGS                            $140,000 Fixed Costs                     $ 43,000 SG&A E

Q. What is the importance of investigation of incidents? 1. Incident investigation is the process of identifying the underlying causes of incidents and implementing steps to pr