Annual sales figure when evaluating this project

Assignment Help Financial Management
Reference no: EM13885433

Winnebagel Corp. currently sells 33,000 motor homes per year at $71,000 each, and 13,500 luxury motor coaches per year at $108,000 each. The company wants to introduce a new portable camper to fill out its product linl; it hopes to sell 28,000 of these campers per year at $15,500 each. An in dependant consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,400 units per year, and reduce the sales of its motor coaches by 1,100 units per year. What is the amount to use as the annual sales figure when evaluating this project?

Reference no: EM13885433

Questions Cloud

Preparing to calculate its cost of debt : Handy Dandy Inc is preparing to calculate its cost of debt. It presently has debt outstanding that pays $ 81 per year in interest and has seven years left unto maturity. The current market value of those bonds is $ 1,090. The company pays 35% in taxe..
Begin paying annual dividends : NU YU announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $0.63 a share. The following dividends will be $0.68, $0.83, and $1.13 a share annually for the following three years, respec..
Two different names of the market risk are systematic risk : Two different names of the market risk are systematic risk or _____ risk. We measure the market risk of a stock using _____.
What is the portfolios beta : Bob has $200,000 invested in a 2-stock portfolio. $120,000 is invested in Stock A and the remainder is invested in Stock B. Stock A's beta is 0.75 and B’s beta is 1.25. What is the portfolio's beta?
Annual sales figure when evaluating this project : Winnebagel Corp. currently sells 33,000 motor homes per year at $71,000 each, and 13,500 luxury motor coaches per year at $108,000 each. The company wants to introduce a new portable camper to fill out its product linl; it hopes to sell 28,000 of the..
Decided to bid on the contract : Romo Enterprises needs someone to supply it with 127,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. If your tax rate is 30 percent and you require a retur..
Corporate bond paying nine percent semi-annual coupon : Consider a 30-year corporate bond paying 9 percent semi-annual coupon. The current yield to maturity is 11 percent. a. Find the modified duration. b. Refer to part a. If the interest increases by 25 basis points, what is the exact change in price? c...
Cash flows over the four-year life of the investment : An investment has an installed cost of $535,800. The cash flows over the four-year life of the investment are projected to be $213,850, $230,450, $197,110, and $145,820. If the discount rate is zero, what is the NPV?
Considering an expansion into new investment project : Your firm is considering an expansion into a new investment project. The investment would cost $1,000K and there are two states of the world that will determine the values of your existing assets and new investment project today.

Reviews

Write a Review

Financial Management Questions & Answers

  A company needs certain type of machine

A company needs a certain type of machine for the next 5 years. They presently own such a machine, which is now worth $6,000 but will lose $2,000 in value in each of the next 3 years, after which it will be worthless and unusable.

  A project that provides annual cash flows

A project that provides annual cash flows of $17,300 for nine years costs $79,000 today. What is the NPV for the project if the required return is 8 percent?

  Merck wants to develop a promising new

Merck wants to develop a promising new NCE [New Chemical Entity] costing $800  million  to $1 billion to bring through clinical trials to market. How would it expect to finance this project? What would the impact be on its D/E?

  Consider how economic conditions affect the default risk

consider how economic conditions affect the default risk premium. do you think the default risk premium will likely

  A treasury bond with a maturity

A Treasury bond with a maturity of 25 years has an ask price quoted at 139:31. The coupon rate is 4.9 percent, paid semi-annually. What is the yield to maturity of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal pla..

  Calculate the bonds macaulays duration

You own a corporate bond that carries a 5.8 percent coupon rate and pays $ 10,000 at maturity in exactly two years. The current market yield on the bond is 6.1 percent. Coupon interest is paid semiannually and the market price is $ 9,944.32. a. Calcu..

  Realize arbitrage profits in dollars net of transaction cost

An arbitrager at Deutsche Bank notices that the yield on Brazilian Real 6-month risk-free bills is 5.5% per annum and the yield on U.S. 6-month T-bills is 7% per annum. What transactions will the arbitrageur undertake to realize arbitrage profits in ..

  What is the aftertax cash flow from the sale of this asset

Consider an asset that costs $576,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $167,000. If the relevant tax rate is 35..

  T-bills are risk-free

Given the utility function U = E(r) – 0.5Aσ2 and the fact that T-bill offer a risk-free rate of 4%, what is the minimum value for the risk-aversion coefficient A where an investor prefers the T-bills to an investment returning 10% with a standard dev..

  Accumulated on the day that he retires

After retirement, Mario expects to live another 25 years. If he requires $120,000 at the end of each year and interest rates are 7%, how much will Mario need to have accumulated on the day that he retires?

  Present value and future value annuities and annuity dues

Discuss present value and future value annuities and annuity dues. What is the timing of cash flows? What are their differences? What are the advantages of both? How are they used by financial management?

  Calculate the value of your bond relative

Calculate the value of your bond relative to this interest rate using equation 11.2 in the text. Assume that i = 5%. Is your bond selling for a premium or at a discount based on your calculation?

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