Considering the sale of new sound board

Assignment Help Financial Management

Reference no: EM131309745

Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $26,900, and the company expects to sell 1,540 per year. The company currently sells 2,040 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,860 units per year. The old board retails for $22,800. Variable costs are 53 percent of sales, depreciation on the equipment to produce the new board will be $1,490,000 per year, and fixed costs are $1,390,000 per year. If the tax rate is 30 percent, what is the annual OCF for the project

Reference no: EM131309745

Questions Cloud

When did the bulk of the data get transmitted : When did the bulk of the data get transmitted? What caused this transmission spike? Were any ISP sites accessed? If so which ones? What accounts?

Considering new three-year expansion project : H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,490,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be wor..

Could a religious employee ever be considered a hindrance : What aspects of religions or belief systems may come into play in the workplace?What aspects of a religion or belief system would be helpful to know when managing a person with this particular set of beliefs?How would you managed a situation where a..

What is the capital gains yield : You are an investor in company which is an auto parts supplier. They will pay a dividend next year of $0.80 per share and are expected to grow at an annual rate of 2%. The price of the stock is currently $37.24. What is the capital gains yield?

Considering the sale of new sound board : Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $26,900, and the company expects to sell 1,540 per year. The company currently sells 2,040 units of its existing model per year..

How investors see the long-term viability of an organization : Do these regulations and reports have an impact on how investors see the long-term viability of an organization or company in which they plan to invest?

What is implied value of warrants attached to each bond : A company recently issued two types of bonds. The first one consisted of 10-year straight debt with an 6% coupon paid annually. The second consisted of 10-year bonds with a 4.5% coupon paid annually and attached warrants. Both issues sold at their $1..

What is the dollar return and rate of return : Your next assignment is to assume that $10,000 was invested in the stock of General Medical Corporation with the intention of selling after one year. To begin, assume that the stock sale nets $11,500. What is the dollar return on the stock investment..

Overview to senior management on objectives of reward system : Present an overview to senior management on the objectives of reward systems and why it should pay careful attention to the design of the reward system.

User Account

All Pages