What is the profit equation for the company

Assignment Help Financial Management
Reference no: EM131027051

Soumotchka Accessories make customized handbags to order.

The price they can charge depends on how many they sell, x, consistent with the expression:

Price (£) = 242 – 0.4x

The total cost of producing the handbags is: Cost (£) = 300 + 2x + 0.1 x2

(a) What is the profit equation for the company?

Reference no: EM131027051

Questions Cloud

Assuming they donot save any additional funds : Problem 5-3 Finding the required interest rate Your parents will retire in 26 years. They currently have $340,000, and they think they will need $2,500,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don..
The dividend yield and the capital gains yield : Suppose a stock had an initial price of $90 per share, paid a dividend of $2.40 per share during the year, and had an ending share price of $76. Compute the percentage total return. What was the dividend yield and the capital gains yield?
Expected net present value of this purchase opportunity : Stu can purchase a one-bedroom house near his college today for $110,000, including the cost of some minor repairs. He expects to be able to resell it in four years for $150,000 if he just puts a little effort into cleaning up the property. At a disc..
Identical deposit each year up to and including the year : Today is your birthday and you decide to start saving for college. You will begin college on your 18th birthday and will need $10,000 per year at the end of each of the next 4 years (after that 18th birthday - isn't it nice the college lets you pay a..
What is the profit equation for the company : Soumotchka Accessories make customized handbags to order. The price they can charge depends on how many they sell, x, consistent with the expression: What is the profit equation for the company?
Calculate the bonds default risk premium : Dakota Corporation 15-year bonds have an equilibrium rate of return of 10 percent. For all securities, the inflation risk premium is 1.75 percent and the real risk-free rate is 3.50 percent. The security’s liquidity risk premium is 1.20 percent and m..
What is the NPV and IRR of the project : Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 –$592,000 1 222,000 2 165,000 3 230,000 4 209,000 All cash flows will occur in Erewhon and are expressed in dollars...
Calculate the initial outlay and depreciable asset : A company is purchasing a new machine which will cost $130,000 with additional shipping costs of $5,000 and set up and installation costs of $12,000. An additional $8,000 in Net Working Capital will be required. Calculate the Initial Outlay (startup ..
The increment to the market value of the equity equals : Red Shoe Co. has concluded that additional equity financing will be needed to expand operations and that the needed funds will be best obtained through a rights offering. Assume that the increment to the market value of the equity equals the gross pr..

Reviews

Write a Review

Financial Management Questions & Answers

  Apply tax rate to both the lump sum and the yearly payments

You just won the 800 million dollar lottery. You have the option of taking 500 million as one lump sum or 25.8 million TODAY (year 0) then 25.8 million for the next 30 years. We need to pay taxes. Assume the tax rate is 40 percent for all payments. H..

  Dividend changes-issues of debt-stock splits

What is asymmetric information and how does it affect how investors view financial moves like dividend changes, issues of debt, stock splits, etc.?

  What should an annual interest rate

Your uncle, Jerry, has just won a lottery prize. He has been given two options: (1) a lump sum payment of $350,000 now, or (2) $3,000 at the end of each month for the next 15 years. Assume your uncle is able to receive a 5.00 percent annual return co..

  How much will you have to deposit now to meet your goal

You just won the lottery! You wish to put away enough money so that you can withdraw $8,500 per month for 20 years. You can earn 9.9% rate on any funds you deposit. How much will you have to deposit now to meet your goal?

  Falling forest products plans on paying dividends

Falling Forest Products LLC will end 2014 with a net profit before tax of $400,000. The company is subject to a 40% federal plus state income tax rate, and has 100,000 shares of cumulative preferred stock that normally pay 40 cents per share per year..

  What is the effective cost of its trade credit

Andrews Corporation buys on terms of 1/8, net 45 days, it does not take discounts, and it actually pays after 58 days. What is the effective cost of its trade credit? (Use a 365-day year.)

  Price of old bonds in open market-valuation procedures

The interest rate on a2 rated bonds was now 6%. $30million 15yr bond issue is outstanding and was initially issued at 9% 5yrs ago. Barton is considering refunding the bond issue. compute price of old bonds in open market, using the valuation procedur..

  Covariance of rate of return with market portfolio doubles

The current market price of a security is $40, the security's expected return is 13%, the riskless rate of interest is 7%, and the market risk premium is 8%. a. What will be the security's price, if the covariance of its rate of return with the marke..

  What annual equal payment series

What annual equal payment series is necessary to repay the following increasing series of payments?

  Compute the combined worth of steves retirement assets

Steve is about to retire and wants to calculate the total worth of his retirement assets. He has a corporate pension paying $2250 at the beginning of every month. He is also entitled for Social Security benefits of $1450 at the beginning of every mon..

  Use to determine which payment option he prefers

Jesse just won the state lottery. He has been given the option of receiving either $62.9 million today or $5 million a year for the next 35 years, with the first payment paid today. Describe the process that Jesse should use to determine which paymen..

  Cost of capital equal to the expected return on the market

cost of capital equal to the expected return on the market which is 12%. project Used books 0.85 Beta 12% expected return. if the projects are mutually exclusive, which one would be accept.

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