Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please, I also need to see the hand calculation details to know how to do it. Thanks Problem 3-10 (Algo) The Tuff Wheels was getting

Please, I also need to see the hand calculation details to know how to do it. Thanks
image text in transcribed
image text in transcribed
image text in transcribed
Problem 3-10 (Algo) The Tuff Wheels was getting ready to start its development project for a new product to be added to its small motorized vehicle line for children. The new product is called the Kiddy Dozer. It will look like a miniature bulldozer, complete with caterpillar tracks and a blade. Tuff Wheels has forecasted the demand and the cost to develop and produce the new Kiddy Dozer. The following table contains the relevant information for this project. Development cost Estimated development tine Pilot testing Ramp-up cost Marketing and support cost Sales and production volume Unit production cost Unit price Interest rate $750,000 9 months $200,000 $400,000 $150,000 per year 60,000 per year 100 $ 155 Tuff Wheels also has provided the project plan shown as follows. As can be seen in the project plan, the company thinks that the product life will be three years until a new product must be created. YARI YEAR 2 YEARS YEAR 999999999999999 Protect SD KDO DO Deslorent Pilot Testing Pamo Marketing and Support Production and Assume all cash flows occur at the end of each period. Assume all cash flows occur at the end of each period. a. What is the net present value (discounted at 8%) of this project? Consider all costs and expected revenues. (Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Round your answer to the nearest thousand.) Not present value b. What is the impact on NPV for the kiddy Dozer if the actual sales are 50,000 per year? 70,000 per year? (Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Round your answer to the nearest thousand.) NPV 50.000 NPV 70.000 W b. What is the impact on NPV for the Kiddy Dozer if the actual sales are 50.000 per year? 70.000 per year? (Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Round your answer to the nearest thousand.) NPV 50.000 NPV 70,000 c. Based on the original sales level of 60,000, what is the effect on NPV caused by changing the discount rate to 9% 10%, or 113? (Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Round your answer to the nearest thousand.) NAVOS NPV 10% NPV 11%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ronald W Hilton

7th Edition

0073022853, 978-0073022857

More Books

Students also viewed these Accounting questions

Question

Explain how to choose a career path based on a persons education.

Answered: 1 week ago

Question

What are the steps in the T&D process?

Answered: 1 week ago

Question

Define training and development.

Answered: 1 week ago