The case for Capital Budgeting pro-9015 Cualed by nature mat aven cost advantages this investment project ided to further evaluate the market potential of smart furniture, and sent production of smart furniture could gain 15%-20% of the market share. The company's to market consumers. The survey results believed that the company's market research generated a cost of 250,000 yuan. Based on this, the company began to consider mvesting in the production of smart furniture. The smart furniture production site is planned to be located in a factory owned by the company. The current after-tax net price of this factory and the land occupied is 150,000 yuan, The company managers began to prepare an analysis report on the new investment project The relevant information is summarized as follows: the cost of intelligent furniture production equipment is 100,000 yuan, and the net residual value is expected to be 20,000 yuan at the end of the fifth year of the project. The device can be sold at a market value of 30 000 yuan. The production equipment is expected to be able to produce smart furniture in the following five years: 500, 800, 1200, 1000 and 600. The pro first years expected to be 200 yuan. Considering the com market, the company's management expects the price of t furniture in the of the furniture o increase at a rate of 2% per year. The price of raw materials for making cash outflows from the manufacturing process are exp The case for Capital Budgeting Company A is a manufacturer of household appliances such as refr conditioners, and electric fans. The company is looking for projects that car company's value. The company's management has found that the smart fur has great potential and has not been occupied by larger home appliance m The company believes that its own cost advantages and mature marketing ski the company to profit from this investment project. The company decided to further evaluate the market potential of smart furnit a questionnaire to market consumers. The survey results believed that th production of smart furniture could gain 15%-20% of the market share. Th market research generated a cost of 250,000 yuan. Based on this, the compa consider investing in the production of smart furniture. The smart furniture pr - planned to be located in a factory owned by the company. The current ice of this factory and the land occupied is 150,000 yuan. e company managers began to prepare an analysis report on the new bject. The relevant information is summarized as follows: the cost of intellige duction equipment is 100,000 yuan, and the net residual value is expected to n at the end of the fifth year of the project. The device can be sold at a mark 200 yuan. The production equipment is expected to be able to produce smar e following five years: 500, 800, 1200, 1000 and 600. The price of smart furnit year is expected to be 200 yuan. Considering the competitiveness of the et, the company's management expects the price of smart furnit f 2% per year. The price of raw materiale utflows from the apled is 150,000 yuan mana want prepare an analysis report on the new investment is summarized as follows: the cost of intelligent furniture ment is 000 yuan, and the net residual value is expected to be 20,000 of the fifth year of the project. The device can be sold at a market value o production equipment is expected to be able to produce smart furniture ve years: 500, 800, 1200, 1000 and 600. The price of smart furniture in the ted to be 200 yuan. Considering the competitiveness of the furniture any's management expects the price of smart furniture to increase at a - The price of raw materials for making smart furniture will also climb, so the manufacturing process are expected to grow by 10% annually. The the first year is 100 yuan per unit. Based on the company's existing he income tax rate applicable to the new smart furniture project is 34%. lieves that it must maintain a certain amount of investment in working Eain the normal operation of the project. Like other manufacturing panies must purchase raw materials and invest in inventories prior to sales. They also need to retain a certain amount of cash for unforeseen credit sales activities also generate certain accounts receivable. Therefore, nt predicts that the total investment in working capital will be 10,000 yuan g of the first year from the start of production, and there will be increases or ng the project operation, as shown in the table below. When the project Ling capital investment can be fully recovered, that is, it can be reduced to 0 he fifth year. 0 1 2 3 4 5 pital 10000 10000 16320 24970 21220 ect requires a 10% rate of return, is the project an acceptable project? the payback period of the project, including static payback period and back period. Wergey LAN KON 15-20% of the Markos, share Him owned by the company. The current after her 150.000 yuan 50.000 van based on this the company smart furnure The smart furniture production S genera a planned to be locatedy vesting in the p price of the factory and the kind occupied The company managers began to prepare an analysis report on the new investment project. The relevant information is summarized as follows the cost of intelligent furniture production equipment is 100,000 yuan, and the net residual value is expected to be 20.000 quan at the end of the fifth year of the project. The device can be sold at a market value of 30,000 yuan. The production equipment is expected to be able to produce smart furniture in the following five years: 500, 800, 1200, 1000 and 600 The price of smart furniture in the first year is expected to be 200 yuan. Considering the competitiveness of the furniture market, the company's management expects the price of smart furniture to increase at a rate of 2% per year. The price of raw materials for making smart furniture will also climb, so cash outflows from the manufacturing process are expected to grow by 10% annually. The operating cost for the first year is 100 yuan per unit. Based on the company's exsting taxable income, the income tax rate applicable to the new smart furniture project is 34% The company believes that it must maintain a certain amount of investment in working capital to maintain the normal operation of the project Like other manufacturing companies, companies must purchase raw materials and invest in inventories prior to production and sales. They also need to retain a certain amount of cash for unforeseen expenses and credit sales activities also generate certain accounts receivable Therefore, the management predicts that the total investment in working capital will be 18,000 yuan at the beginning of the first year from the start of production, and there will be increases of decreases during the project operation, as shown in the table below When the post ends the working capital Investment can be fully recovered, that a, it can be reduced to) at the end of the fifth year 10000 ESTIONS og requires a 20% rate of retums payback period of the predispos The case for Capital Budgeting pro-9015 Cualed by nature mat aven cost advantages this investment project ided to further evaluate the market potential of smart furniture, and sent production of smart furniture could gain 15%-20% of the market share. The company's to market consumers. The survey results believed that the company's market research generated a cost of 250,000 yuan. Based on this, the company began to consider mvesting in the production of smart furniture. The smart furniture production site is planned to be located in a factory owned by the company. The current after-tax net price of this factory and the land occupied is 150,000 yuan, The company managers began to prepare an analysis report on the new investment project The relevant information is summarized as follows: the cost of intelligent furniture production equipment is 100,000 yuan, and the net residual value is expected to be 20,000 yuan at the end of the fifth year of the project. The device can be sold at a market value of 30 000 yuan. The production equipment is expected to be able to produce smart furniture in the following five years: 500, 800, 1200, 1000 and 600. The pro first years expected to be 200 yuan. Considering the com market, the company's management expects the price of t furniture in the of the furniture o increase at a rate of 2% per year. The price of raw materials for making cash outflows from the manufacturing process are exp The case for Capital Budgeting Company A is a manufacturer of household appliances such as refr conditioners, and electric fans. The company is looking for projects that car company's value. The company's management has found that the smart fur has great potential and has not been occupied by larger home appliance m The company believes that its own cost advantages and mature marketing ski the company to profit from this investment project. The company decided to further evaluate the market potential of smart furnit a questionnaire to market consumers. The survey results believed that th production of smart furniture could gain 15%-20% of the market share. Th market research generated a cost of 250,000 yuan. Based on this, the compa consider investing in the production of smart furniture. The smart furniture pr - planned to be located in a factory owned by the company. The current ice of this factory and the land occupied is 150,000 yuan. e company managers began to prepare an analysis report on the new bject. The relevant information is summarized as follows: the cost of intellige duction equipment is 100,000 yuan, and the net residual value is expected to n at the end of the fifth year of the project. The device can be sold at a mark 200 yuan. The production equipment is expected to be able to produce smar e following five years: 500, 800, 1200, 1000 and 600. The price of smart furnit year is expected to be 200 yuan. Considering the competitiveness of the et, the company's management expects the price of smart furnit f 2% per year. The price of raw materiale utflows from the apled is 150,000 yuan mana want prepare an analysis report on the new investment is summarized as follows: the cost of intelligent furniture ment is 000 yuan, and the net residual value is expected to be 20,000 of the fifth year of the project. The device can be sold at a market value o production equipment is expected to be able to produce smart furniture ve years: 500, 800, 1200, 1000 and 600. The price of smart furniture in the ted to be 200 yuan. Considering the competitiveness of the furniture any's management expects the price of smart furniture to increase at a - The price of raw materials for making smart furniture will also climb, so the manufacturing process are expected to grow by 10% annually. The the first year is 100 yuan per unit. Based on the company's existing he income tax rate applicable to the new smart furniture project is 34%. lieves that it must maintain a certain amount of investment in working Eain the normal operation of the project. Like other manufacturing panies must purchase raw materials and invest in inventories prior to sales. They also need to retain a certain amount of cash for unforeseen credit sales activities also generate certain accounts receivable. Therefore, nt predicts that the total investment in working capital will be 10,000 yuan g of the first year from the start of production, and there will be increases or ng the project operation, as shown in the table below. When the project Ling capital investment can be fully recovered, that is, it can be reduced to 0 he fifth year. 0 1 2 3 4 5 pital 10000 10000 16320 24970 21220 ect requires a 10% rate of return, is the project an acceptable project? the payback period of the project, including static payback period and back period. Wergey LAN KON 15-20% of the Markos, share Him owned by the company. The current after her 150.000 yuan 50.000 van based on this the company smart furnure The smart furniture production S genera a planned to be locatedy vesting in the p price of the factory and the kind occupied The company managers began to prepare an analysis report on the new investment project. The relevant information is summarized as follows the cost of intelligent furniture production equipment is 100,000 yuan, and the net residual value is expected to be 20.000 quan at the end of the fifth year of the project. The device can be sold at a market value of 30,000 yuan. The production equipment is expected to be able to produce smart furniture in the following five years: 500, 800, 1200, 1000 and 600 The price of smart furniture in the first year is expected to be 200 yuan. Considering the competitiveness of the furniture market, the company's management expects the price of smart furniture to increase at a rate of 2% per year. The price of raw materials for making smart furniture will also climb, so cash outflows from the manufacturing process are expected to grow by 10% annually. The operating cost for the first year is 100 yuan per unit. Based on the company's exsting taxable income, the income tax rate applicable to the new smart furniture project is 34% The company believes that it must maintain a certain amount of investment in working capital to maintain the normal operation of the project Like other manufacturing companies, companies must purchase raw materials and invest in inventories prior to production and sales. They also need to retain a certain amount of cash for unforeseen expenses and credit sales activities also generate certain accounts receivable Therefore, the management predicts that the total investment in working capital will be 18,000 yuan at the beginning of the first year from the start of production, and there will be increases of decreases during the project operation, as shown in the table below When the post ends the working capital Investment can be fully recovered, that a, it can be reduced to) at the end of the fifth year 10000 ESTIONS og requires a 20% rate of retums payback period of the predispos
