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
Explain the terms- Stock and  Share Stock Ownership of a company represented by shares that are a claim on the company's earnings and assets. Share Unit of equity

What is the Floating Rate Bonds (FRBs) Bonds whose interest payments fluctuate with changes in general level of interest rates and are tied to a basic rate (termed as the refer

Do you believe an increased common stock cash dividend can send a signal to the common stockholders?  If so, what signal might it send? An increase in cash dividends is frequentl

What factors are responsible for the recent surge in international portfolio investment (IPI)? Answer:  The recent surge in international portfolio investments denotes the global

BFN1014 ASSIGNMENT 2 TRI 2 2012 2013

QUESTION (a) Describe briefly three methods of electronic payment. (b) (i) Explain briefly the term E-Billing. (ii) Outline three advantages of E-Billing. (c) Why is c

Question based on Share Holder Value Maximizations ? Hatsun Agro Product limited (HAPL) over the last Five years has shown a steady growth in its sales revenue and profits. The

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

Financial intermediaries Financial intermediaries are significant to the efficient functioning of the financial markets as they act to bring the borrowers/companies and lenders

Assets Allocation: The investment pattern above should be followed as under: Fresh accretions to the fund and redemption amounts of investments made earlier should be inv