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Can you give me a exel sheet where you answer all this questions Conch Republic Electronics Conch Republic Electronics is a midsized electronics manufacturer located
Can you give me a exel sheet where you answer all this questions Conch Republic Electronics
Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. The company originally repaired radios and other household appliances when it was founded over years ago. Over the years, the company has expanded, and it is now a reputable manufacturer of various specialty electronic items. Jay McCanless, a recent MBA graduate, had been hired by the company in its finance department.
One of the major revenueproducing items manufactured by Conch Republic is a smart phone. Conch Republic currently has one smart phone model on the market and sales have been excellent. The smart phone is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current smart phone has limited features in comparison with newer models. Conch Republic spent $ to develop a prototype for a new smart phone that has all the features of the existing one but adds new features such as wifi tethering. The company has spent a further $ for a marketing study to determine the expected sales figures for the new smart phone.
Conch Republic can manufacture the new smart phone for $ each in variable costs. Fixed costs for the operation are estimated to run $ million per year. The estimated sales volume is and per year for the next five years, respectively. The unit price of the new smart phone will be $ The necessary equipment can be purchased for $ million and will be depreciated on a sevenyear MACRS schedule. It is believed the value of the equipment in five years will be $ million.
Net working capital for the smart phones will be percent of sales and will occur with the timing of the cash flows for the year ie there is no initial outlay for NWC Changes in NWC will thus first occur in Year with the first years sales. Conch Republic has a percent corporate tax rate and a required rate of return of percent.
Shelly has asked Jay to prepare a report that answers the following questions:
Questions
What is the payback period of the project?
What is the profitability index of the project?
What is the IRR of the project?
What is the NPV of the project?
How sensitive is the NPV to changes in the price of the new smart phone?
How sensitive is the NPV to changes in the quantity sold?
Should Conch Republic produce the new smart phone?
Suppose Conch Republic loses sales on other models because of the introduction of the new model. How would this affect your analysis?
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