Other 35.00 da 135,000 75,000 Telephone Depreciation 5,300- 25,000 296,300 "Sight-depreciation is calculated by using all initial investment costs over a 10-year period, single After reviewing the data, Karl Nemming, vice president of operations, argued against the proposed plantar conceed because the plant would cam significantly than the normal.3% tuon alex. All other plants in the company were eaming between 7.5 and 0.5% also noted that it would take more than 5 years to recover the total initial outlay of $560,000. In the past, the company had always inted that payback be no more than 4 years. The company's cost of capital 10% xume that there are no income. Required: 1. Prepare a variable-coting income statement for the proposed plant. Shaftel Ready Mix Income Statement For the Proposed Plant Las: Variable expenses Contribution margin Lende Salaries Telephone Depreciation 1. Prepare income statement in proper form with company name, statement name and date. List alle variable expense for contribution margin Subtracted for income. Canulate ratio of net income to six by dividing notes by not income. Compute the ratio of net income to enter a percent, rounded to two decimal places Katthat the tum on significantly lower than the company average? 2. Compute the payback period for the proposed plant. Round to two decimal plac 1.25 year De Karl right that the payback period is greater than 4 3. Compute the NPV and the IRR for the proposed plant. Round present value calculations and final NPV to the RR 306,094 The IRR is between 25% and 30% Would your never be affected if you were told that the future and equipment could be old for their book? If your never would be affected if you were told that the fumiture and equipment could be sold for their book values, peat the analyse with this affect considered. If not, leave the entry box blank Round present value calculations and final NPV to the next dollar NPV The IRR is between 12% and 14% 4. Compute the cubic yards of cement that must be sold for the new plant to break even. Round your answer to the nearest whole number Uking this bleven volume, compute the NPV and the RR Round present value calculations and final NPV to the whole dollar The IRR is between 9 and 10% Would the investment be acceptable? 5. Compute the volume of cement that must be sold for the IRR to equal the file cost of capital. Round your answer to the nearest whole number Uxing this volume, compute the firm's ected annual income. Round your answer to the nearthed 1,003 Xper year