I need help solving these problems #1-8
Conch Republic Electronics is a midsized electronics company has spent e further $200,000 for a marketing Key West, Florida. The com study to determine the expected sales figures for the Pany president is Shelly Coutts, who inherited the com new smartphone. Pany. The company originally repaired radios and other household Cinch Republic can manufacture the new smart appliances when it was founded more than phone for $205 each in variable costs Fixed costs for 70 years ago. Over the years, the company has expanded, the operation are estimated to run $51 million per year and it is now a reputable manufacturer of various specialty estimated sales volume is 64.000 106.000, 87000. The electronic interns. Jay McCanless, a recent MBA graduate, 78,000, and 54000 per year for the next five years re- has been hired by the company in its finance department. sportively The unit price of the new smartphone will be One of the major revenue producing items Manu $485. The necessary equipment can be purchased for factored by Conch Republic is a smartphone, Conch $34.5 million and will be depreciated on seven-y Republic currently has one smartphone model on the MACRS schedule. It is believed the value of the equip market and sales have been excellent The smartphone mint in five years will be $5.5 mill is a unique item in that it comes in a variety of tropical Net working capital for the smartphones will be colors and preprogrammed to play Jimmy Buffett mu- 20 percent and occur with the timing of the sic. as of sales will there is no initial cutie for However, with any electronic intern, technology cash flows for the year (Le changes rapidly, and the current smartphone has limited NWC Changes in NWC will thus first c Horwath features in comparison with newer models Conch Ro year's sales, Conch Republic has a 35 percent public spent $750 000 to develop a prototype for s new corporate tax rate and a required return of 12 percent smart one that has all the features of the existing one Shelly has asked Jay to prepare a report that but adds new features such as wife tethering The swears the following questions QUESTIONS 6, How sensitive is the NPv to changes in the loan 1. What is the pay pack percid of the project? 2. What is the profitability index of the project? should Conch Republic produce in 3- What is the IRR of the project? 4. What is the Npv of the project? suppose conch Republic loses sales on new is the NPw to changes models because of the introduction at the How sense his effect your analysis? of the new smartphone? mode How woe Conch Republic Electronics is a midsized electronics company has spent e further $200,000 for a marketing Key West, Florida. The com study to determine the expected sales figures for the Pany president is Shelly Coutts, who inherited the com new smartphone. Pany. The company originally repaired radios and other household Cinch Republic can manufacture the new smart appliances when it was founded more than phone for $205 each in variable costs Fixed costs for 70 years ago. Over the years, the company has expanded, the operation are estimated to run $51 million per year and it is now a reputable manufacturer of various specialty estimated sales volume is 64.000 106.000, 87000. The electronic interns. Jay McCanless, a recent MBA graduate, 78,000, and 54000 per year for the next five years re- has been hired by the company in its finance department. sportively The unit price of the new smartphone will be One of the major revenue producing items Manu $485. The necessary equipment can be purchased for factored by Conch Republic is a smartphone, Conch $34.5 million and will be depreciated on seven-y Republic currently has one smartphone model on the MACRS schedule. It is believed the value of the equip market and sales have been excellent The smartphone mint in five years will be $5.5 mill is a unique item in that it comes in a variety of tropical Net working capital for the smartphones will be colors and preprogrammed to play Jimmy Buffett mu- 20 percent and occur with the timing of the sic. as of sales will there is no initial cutie for However, with any electronic intern, technology cash flows for the year (Le changes rapidly, and the current smartphone has limited NWC Changes in NWC will thus first c Horwath features in comparison with newer models Conch Ro year's sales, Conch Republic has a 35 percent public spent $750 000 to develop a prototype for s new corporate tax rate and a required return of 12 percent smart one that has all the features of the existing one Shelly has asked Jay to prepare a report that but adds new features such as wife tethering The swears the following questions QUESTIONS 6, How sensitive is the NPv to changes in the loan 1. What is the pay pack percid of the project? 2. What is the profitability index of the project? should Conch Republic produce in 3- What is the IRR of the project? 4. What is the Npv of the project? suppose conch Republic loses sales on new is the NPw to changes models because of the introduction at the How sense his effect your analysis? of the new smartphone? mode How woe
