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
What is Business risk It is related to response of the firm's earnings before taxes andinterest, or operating profits, to changes in sales. When cost of capital is used to eval

A)  What are the statements of financial information? Talk about two items from each. B)   Describe statement of changes in financial positions, with an example.

Explain the Benefits of benchmarking - Better understanding of business, competition and customers. - Improves business performance and discourages complacency. - Good wa

Ashok is to receive an amount of Rs. 15,00,000 from his relative after 3 years. He wants to buy a house for which he wants the money to be paid now. His relative had al


Question 1 Describe the importance of commodity finance and sensitive commodities Question 2 Securities purchased by a bank for investment purposes are referred to as seconda

Net Present Value (NPV) In corporate finance, the current value (the value of cash to be received in the future expressed in today's dollars) of an investment in excess of the

QUESTION 1 (a) What do you understand by the term Civil Society Organisations? (b) Distinguish between sectional and promotional groups. Give examples to support your answer

Question: PART A With the view to modernise its accounting system Government is considering adopting International Public Sector Accounting Standards (IPSAS) so as to maxim

What is meant by the terms that an option is in-, at-, or out-of-the-money? Answer:  A call or put option with S t > E (E > S t ) is considered to as trading in-the-money.  If