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Pancho Republic Electronics is a midsized electronics manufacturer founded over 7 0 years ago that originally repaired radios, but it expanded and now is a
Pancho Republic Electronics is a midsized electronics manufacturer founded over years ago that originally repaired radios, but it expanded and now is a reputed manufactures of various electronic items including smart phones, and is located in Key West, Florida. The company is presided by Shelley Couts, who inherited the company. you were hired as a recent MBA in the finance department. Pancho Republic already manufactures a smart phone model, which it intends to stop manufacturing in two years. If it does not stop, it will sell and units at $ each, reapectively over the next two years. The variable cost per unit of the existing model is $ and fixed costs are $ per year. With the introduction of the new smart phone, gales of the existing model will drop by units per year and the unit price will have to be lowered to $ Variable costs and fixed costs of old PDA. The corporate tax rate for Pancho Electronics is percent, and its required rate of return is Shelley has asked you to prepare a report that answers the following questions. a Points What is the profitability index of the project? b Points What is the IRR of the project? c Points What is the NPV of the project?
Pancho Republic Electronics is a midsized electronics manufacturer founded over years
ago that originally repaired radios, but it expanded and now is a reputed manufactures of
various electronic items including smart phones, and is located in Key West, Florida. The
company is presided by Shelley Couts, who inherited the company. you were hired as a recent
MBA in the finance department.
Pancho Republic already manufactures a smart phone model, which it intends to stop
manufacturing in two years. If it does not stop, it will sell and units at $
each, reapectively over the next two years. The variable cost per unit of the existing model is
$ and fixed costs are $ per year. With the introduction of the new smart phone,
gales of the existing model will drop by units per year and the unit price will have to
be lowered to $ Variable costs and fixed costs of old PDA.
The corporate tax rate for Pancho Electronics is percent, and its required rate of return is
Shelley has asked you to prepare a report that answers the following questions.
a Points What is the profitability index of the project?
b Points What is the IRR of the project?
c Points What is the NPV of the project?
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