Tweet
Any accountants out there or business majors? I have to study for a test and I cant figure out a couple questions. They are pretty straightforward, but I cant figure them out thansk.
5.
The Connecticut Company developed a new product with fixed production costs of $3,100,000. The fixed marketing costs were estimated at $940,000. The sales department forecasts that they can expect to sell 600,000 units in the first year. The direct costs of production per unit include $11.25 for materials, $12.50 for labor and $7.25 for marketing. The company faces a 38% income tax rate, which includes federal and state and federal taxes. The company requires a profit, after taxes, of $1,500,000.
What is the price that will produce the required profits?
7.
Duke Corporation is considering a new project. The project has an initial cash outflow of $2,550,000 and earnings before depreciation and taxes (EBDT) of $875,000 each year for 10 years. The equipment used for the project will require a disposal and removal cost of $1,350,000 at the end of year 10. The tax rate is 39% and the company uses straight-line depreciation. The weighted average cost of capital, which is their required rate of return, is 12%.
Should the company undertake the project? Why?
5.
The Connecticut Company developed a new product with fixed production costs of $3,100,000. The fixed marketing costs were estimated at $940,000. The sales department forecasts that they can expect to sell 600,000 units in the first year. The direct costs of production per unit include $11.25 for materials, $12.50 for labor and $7.25 for marketing. The company faces a 38% income tax rate, which includes federal and state and federal taxes. The company requires a profit, after taxes, of $1,500,000.
What is the price that will produce the required profits?
7.
Duke Corporation is considering a new project. The project has an initial cash outflow of $2,550,000 and earnings before depreciation and taxes (EBDT) of $875,000 each year for 10 years. The equipment used for the project will require a disposal and removal cost of $1,350,000 at the end of year 10. The tax rate is 39% and the company uses straight-line depreciation. The weighted average cost of capital, which is their required rate of return, is 12%.
Should the company undertake the project? Why?
= 2,419,355
are you kidding me? lol.
Comment