Question
6)Nadine Inc. has a variable cost ratio of 70% and fixed costs of $90,000. What sales revenue is needed to generate a $120,000 profit? 7)It
6)Nadine Inc. has a variable cost ratio of 70% and fixed costs of $90,000. What sales revenue is needed to generate a $120,000 profit? 7)It costs Seliber, Inc. $65 per unit to manufacture 1,000 units per month of a product that it can sell for $75 each. Alternatively, Seliber could sell the units at an earlier stage of processing, which would save $30 per unit. Seliber could sell the simpler product for $50 each. How would selling the simpler product affect Seliber's profit? 8)It costs Bodhis, Inc. $70 per unit to manufacture 1,000 units per month of a product that it can sell for $100 each. Alternatively, Bodhis could process the units further into a more complex product, which would cost an additional $40 per unit. Bodhis could sell the more complex product for $145 each. How would processing the product further affect Bodhis's profit? 9)Jimble Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $250,000. The equipment will have an initial cost of $1,300,000 and have an 8 year life. There is no salvage value for the equipment. If the hurdle rate is 10%, what is the internal rate of return? Ignore income taxes.
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