Explain what is the amount of the sales

Assignment Help Finance Basics
Reference no: EM1344380

The Fluffy Feather sells customized handbags. Currently, it sells 18,000 handbags annually at an average price of $89 each. It is considering adding a lower-priced line of handbags that sell for $59 each. The firm estimates it can sell 7,000 of the of the lower-priced handbags but will sell 3,000 less of the higher priced handbags by doing so. What is the amount of the sales that should be used when evaluating the addition of the lower-priced handbags?

Reference no: EM1344380

Questions Cloud

What will the cash flows for this project be : The firm has a tax rate of 30 percent, an opportunity cost of capital of 0 percent, and it expects net working capital to increase by $93,000.00 at the beginning of the project.
Determine firms fundamental, or intrinsic value : What is a company's fundamental, or intrinsic, value? What might cause a company's intrinsic value to be different than its actual market value?
Code scheme to meet marketing managers requirements : Design a code scheme that will meet the marketing managers stated requirements.
Value of the tax benefits from depreciation : The cost of capital is 14 percent, and the firm's tax rate is 40 percent - Estimate the present value of the tax benefits from depreciation
Explain what is the amount of the sales : Explain what is the amount of the sales that should be used when evaluating the addition of the lower-priced handbags?
Using capm approach to find cost of common stock : You are trying to compute the price of a preferred stock you are examining. This preferred stock has an yearly dividend of $5 per share and a par value of $30.
Explain what is the amount of the initial cash flow : Explain what is the amount of the initial cash flow for this expansion project - current manufacturing facility
Book value of this equipment at the end of year : Which one of the following will correctly give you the book value of this equipment at the end of year 2
Direct and indirect costs of bankruptcy : Illustrate out the direct and indirect costs of bankruptcy. In brief explain each.

Reviews

Write a Review

Finance Basics Questions & Answers

  Ytm-ytc and hpr

What was the yield to maturity for both bonds on November 1, 2009? What was the yield to call for both bonds on November 1, 2009? At what price did you sell each bond on November 1, 2010?

  Give examples of good and bad guarantees

Given all the service guarantees we see or hear on a daily bases, do these really make you feel better about the services you are paying for at the bank, restaurant, cable company or retail store?

  Calculation of budgeted department cost and production unit

Calculation of budgeted department cost, production unit, direct material purchase cost & direct labour cost

  Valuation principle problems

Valuation Principle Problems: Suppose that Bondi Inc. is a holding company that owns both Pizza Hut and Kentucky Fried Chicken Franchised Restaurants. If the value of Bondi is $130 million, and the Pizza Hut Franchises are worth $70 million, then wha..

  Calculating nominal cash flow

Etonic Inc. is considering an investment of $365,000 in an asset with an economic life of 5 years. The company estimates that the nominal yearly cash revenues and expenses at the end of the 1st year will be $245,000

  Journal entries for the original issue

Discuss the  journal entries for the original issue  and the early redemption.

  Optimal debt level-unlevered firm and financial distress

A Corporation is unlevered, zero growth firm with expected EBIT of $4 million and corporate tax rate of 40% Find out the optimal debt level according to MM with corporate taxes (with no financial distress)?

  Holding period returns

The returns for IMB over the last 3 years are given below.

  Narrate the merits of opening more stores in same market

Narrate the merits of opening more stores in same market area and Divide your answer into sections

  Determining the monthly loan payments

Tim Smith is shopping for a second hand car. He has found one priced at $4,500. Supposing that Tim accepts the dealer's offer, what will his monthly (end-of-month) payment amount be?

  Beta analysis of hewlett packard

You are analyzing the beta for Hewlett Packard and have broken down the company into four broad business groups, with market values and betas for each group.

  Determination of projects npv

Epsilon Company is evaluating an expansion of its business. The cash-flow forecasts for the project are as follows:

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