Question
CASE 1 If Manitowoc Crane maintains the same yuan price and in effect sells for fewer dollars, the annual sales price per unit is equal
CASE 1
If Manitowoc Crane maintains the same yuan price and in effect sells for fewer dollars, the annual sales price per unit is equal to
($24,000Yuan7.70/$)Yuan8.60/$=$21,488.37.
The direct cost per unit is 75% of the sales, or
$24,0000.75=$18,000.
Case 1 | Year 1 | Year 2 | Year 3 | Year 4 |
Sales volume (units) | 20,000 | 22,400 | 25,088 | 28,099 |
Sales price per unit | $21,488.37 | $21,488.37 | $21,488.37 | $21,488.37 |
Total sales revenue | 429,767,400 | 481,339,488 | 539,100,227 | 603,801,709 |
Direct cost per unit | $18,000 | $18,000 | $18,000 | $18,000 |
Total direct costs | 360,000,000 | 403,200,000 | 451,584,000 | 505,782,000 |
Gross profits | $69,767,400 | $78,139,488 | $87,516,227 | $98,019,709 |
Part 2
Case 1 | Year 5 | Year 6 | Year 7 | Year 8 |
Sales volume (units) | 31,471 | 35,247 | 39,477 | 44,214 |
Sales price per unit | $21,488.37 | $21,488.37 | $21,488.37 | 21,488.37 |
Total sales revenue | 676,260,492 | 757,400,577 | 848,296,383 | 950,086,791 |
Direct cost per unit | $18,000 | $18,000 | $18,000 | $18,000 |
Total direct costs | 566,478,000 | 634,446,000 | 710,586,000 | 795,852,000 |
Gross profits | $109,782,492 | $122,954,577 | $137,710,383 | $154,234,791 |
Part 3
If Manitowoc's weighted average cost of capital is 13%, what is the cumulative present value of the firm's gross margin? $enter your response here (Round to the nearest dollar.)
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