Calculate the revenue - operating cost, Financial Management

Chrysler decides to avoid the problems associated with exporting autos to Japan by building a plant in Japan. The cost is expected to be $1 billion with $500 million to be spent now and the remaining to be spent at the end of year 3. The plant will be placed in service on January 1 of year 4 and will be in operation, once placed in service, for a total of 30 years. During its 30 years of operations, operating costs are expected to be $150 million each year. Salvage value will be negligible. How much revenue must this plant generate annually during its 30-year operating life to cover all costs, i.e. the cost of building the plant and operating costs? Chrysler uses a 10% required return. Assume no taxes for this analysis.

Posted Date: 3/2/2013 3:06:04 AM | Location : United States







Related Discussions:- Calculate the revenue - operating cost, Assignment Help, Ask Question on Calculate the revenue - operating cost, Get Answer, Expert's Help, Calculate the revenue - operating cost Discussions

Write discussion on Calculate the revenue - operating cost
Your posts are moderated
Related Questions
Determine the name of some profit margin ratios Other profit margin ratios can also be computed: Gross profit/ turnover Profit after tax/ turnover Advertising co

In Time Series Analysis, we try to identify and determine the pattern of changes in the data collected over regular intervals of time. The data collected can be at a periodical int

For this assessment, you will be required to select a role within the financial services industry that interests you. Undertake your own research to find out about the role you hav

Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 7% (annual coupon payments) and a face value of $1000. Andrew believes it can get a rating of A from

Describe the benefits of Wealth maximisation criterion Value of an asset must be viewed in terms of the benefits it can produce. Worth of a course of action can similarly be ju

Explain the Sovereign Risk Sovereign risk denotes a country imposing exchange restrictions on a currency included in a swap making it expensive, or not possible, for a counterp

Due to the complexity of the tasks involved in many projects, communication of responsibility for those tasks is often helped by means of graphical planning techniques.

Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

Mr. X invests Rs. 10000 at 10% p.a compounded semi-annually. Compute value after three years.

How can we measure a company's cost of capital in emerging nations, especially when there is no state bond which we could take as a reference? Although there is no state bond w