Homework: Chapter 13 Homework Save Score: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 pts 5657 P13-7 (similar to) Question Help 365 (Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new lino of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of S97 each, and the company analysts performing the analysis expect that the firm can sell 110,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology in ma addition vanable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,100,000 per year. To manufacture this product, Blinkeria wil need to buy a computerized production machine for $10.6 million that has no residual )466 or salvage value and will have an expected life of five years. In addition, the firm expects it will have to invest an additional 301,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here 2298 a. Calculate the project's NPV. 6708 b. Determine the sensitivity of the project's NPV to an) 11 percent decrease in the number of units sold, c. Determine the sensitivity of the project's NPV to a[n) 11 percent decrease in the price per unit d. Determine the sensitivity of the project's NPV to an 11 percent increase in the variable cost per unit. ork: Chapter 13 Homework 1 of 2 (1 complete) HW Score: r to EQ Point 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering int - Data Table U el Initial cost of the machine Expected life Salvage value of the machine Working capital requirement Depreciation method Depreciation expense Cash fixed costs-excluding depreciation Variable costs per unit Required rate of return or cost of capital Tax rate $10,600,000 5 years $0 $301,000 straight line $2,120,000 per year $1,100,000 per year $20 10.8% 34% Print Done Clear All 25 W 6). Save Homework: Chapter 13 Homework Score: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 pts P13-7 (similar to) Question Help (Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $97 each, and the company analysts performing the analysis expect that the firm can sell 110,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology. In addition, variable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,100,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10.6 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $301,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: m asiness Finance CRN 16663 Sav Smework: Chapter 13 Homework re: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 X ysts ts are 3-7 (similar to) Question Help lated to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering oducing Irsonal mputer Data Table orming le years, r which riable 0,000 p . 6 million Initial cost of the machine $10,600,000 has no Ipects it have to Expected life 5 years mation Salvage value of the machine $0 Working capital requirement $301,000 Calcula Depreciation method straight line Determ Depreciation expense $2,120,000 per year The NE Cash fixed costs-excluding depreciation $1,100,000 per year Variable costs per unit $20 Required rate of return or cost of capital 10.8% Tax rate 34% Print Done your arts emaining Clear All Check Answer 27 HUH . Business Finance CRN 16663 Save Homework: Chapter 13 Homework Score: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 pts P13-7 (similar to) Question Help year. to manufacture this product, Blinkena will need to buy a computenzed production machine for $10.6 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $301,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: a. Calculate the project's NPV. b. Determine the sensitivity of the project's NPV to a(n) 11 percent decrease in the number of units sold. c. Determine the sensitivity of the project's NPV to a(n) 11 percent decrease in the price per unit. d. Determine the sensitivity of the project's NPV to a(n) 11 percent increase in the variable cost per unit. e. Determine the sensitivity of the project's NPV to a(n) 11 percent increase in the annual fixed operating costs. f. Use scenario analysis to evaluate the project's NPV under worst- and best case scenarios for the project's value drivers. The values for the expected or base-case along with the worst- and best-case scenarios are listed here: a. The NPV for the base-case will be $1. (Round to the nearest dollar.) Enterranean in the answari hox and then click Check Answer Score: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 pts P13-7 (similar to) Question Help year to manufacture this product, Blinkena will need to buy a computerzed production machine for $10.6 million that has no residual or salvage value, and will have an expected lil uf five years. In addition, the firm expects it will have to invest an additional $301,000 in working capital to support the new business. Other pertinent Data Table Worst Case Best Case Unit sales Price per unit Variable cost per unit Cash fixed costs per year Depreciation expense Expected or Base Case 110,000 $97 $(20) $(1,100,000) $(2,120,000) 79,200 $86.33 $(22.40) $(1,331,000) $(2,120,000) 140,800 $118.34 $(18.00) $(979,000) $(2,120,000) Print Done Enter your answer in the answer box and then click Check Answer. ? 6 parts remaining Clear All Homework: Chapter 13 Homework Save Score: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 pts 5657 P13-7 (similar to) Question Help 365 (Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new lino of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of S97 each, and the company analysts performing the analysis expect that the firm can sell 110,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology in ma addition vanable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,100,000 per year. To manufacture this product, Blinkeria wil need to buy a computerized production machine for $10.6 million that has no residual )466 or salvage value and will have an expected life of five years. In addition, the firm expects it will have to invest an additional 301,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here 2298 a. Calculate the project's NPV. 6708 b. Determine the sensitivity of the project's NPV to an) 11 percent decrease in the number of units sold, c. Determine the sensitivity of the project's NPV to a[n) 11 percent decrease in the price per unit d. Determine the sensitivity of the project's NPV to an 11 percent increase in the variable cost per unit. ork: Chapter 13 Homework 1 of 2 (1 complete) HW Score: r to EQ Point 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering int - Data Table U el Initial cost of the machine Expected life Salvage value of the machine Working capital requirement Depreciation method Depreciation expense Cash fixed costs-excluding depreciation Variable costs per unit Required rate of return or cost of capital Tax rate $10,600,000 5 years $0 $301,000 straight line $2,120,000 per year $1,100,000 per year $20 10.8% 34% Print Done Clear All 25 W 6). Save Homework: Chapter 13 Homework Score: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 pts P13-7 (similar to) Question Help (Related to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of $97 each, and the company analysts performing the analysis expect that the firm can sell 110,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of new technology. In addition, variable costs are expected to be $20 per unit and fixed costs, not including depreciation, are forecast to be $1,100,000 per year. To manufacture this product, Blinkeria will need to buy a computerized production machine for $10.6 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $301,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: m asiness Finance CRN 16663 Sav Smework: Chapter 13 Homework re: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 X ysts ts are 3-7 (similar to) Question Help lated to Checkpoint 13.2 and Checkpoint 13.3) (Comprehensive risk analysis) Blinkeria is considering oducing Irsonal mputer Data Table orming le years, r which riable 0,000 p . 6 million Initial cost of the machine $10,600,000 has no Ipects it have to Expected life 5 years mation Salvage value of the machine $0 Working capital requirement $301,000 Calcula Depreciation method straight line Determ Depreciation expense $2,120,000 per year The NE Cash fixed costs-excluding depreciation $1,100,000 per year Variable costs per unit $20 Required rate of return or cost of capital 10.8% Tax rate 34% Print Done your arts emaining Clear All Check Answer 27 HUH . Business Finance CRN 16663 Save Homework: Chapter 13 Homework Score: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 pts P13-7 (similar to) Question Help year. to manufacture this product, Blinkena will need to buy a computenzed production machine for $10.6 million that has no residual or salvage value, and will have an expected life of five years. In addition, the firm expects it will have to invest an additional $301,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided here: a. Calculate the project's NPV. b. Determine the sensitivity of the project's NPV to a(n) 11 percent decrease in the number of units sold. c. Determine the sensitivity of the project's NPV to a(n) 11 percent decrease in the price per unit. d. Determine the sensitivity of the project's NPV to a(n) 11 percent increase in the variable cost per unit. e. Determine the sensitivity of the project's NPV to a(n) 11 percent increase in the annual fixed operating costs. f. Use scenario analysis to evaluate the project's NPV under worst- and best case scenarios for the project's value drivers. The values for the expected or base-case along with the worst- and best-case scenarios are listed here: a. The NPV for the base-case will be $1. (Round to the nearest dollar.) Enterranean in the answari hox and then click Check Answer Score: 0 of 6 pts 1 of 2 (1 complete) HW Score: 33.33%, 3 of 9 pts P13-7 (similar to) Question Help year to manufacture this product, Blinkena will need to buy a computerzed production machine for $10.6 million that has no residual or salvage value, and will have an expected lil uf five years. In addition, the firm expects it will have to invest an additional $301,000 in working capital to support the new business. Other pertinent Data Table Worst Case Best Case Unit sales Price per unit Variable cost per unit Cash fixed costs per year Depreciation expense Expected or Base Case 110,000 $97 $(20) $(1,100,000) $(2,120,000) 79,200 $86.33 $(22.40) $(1,331,000) $(2,120,000) 140,800 $118.34 $(18.00) $(979,000) $(2,120,000) Print Done Enter your answer in the answer box and then click Check Answer. ? 6 parts remaining Clear All
