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Thanks to an investment of $ 200,000 for a new injection machine, A-Design Inc., a specialized company in the design and manufacture of armrests for
Thanks to an investment of $ 200,000 for a new injection machine, A-Design Inc., a specialized company in the design and manufacture of armrests for wheelchairs managed to make a profit from operating $ 42,000 in its first year of production. Expenses funding (interest) on the money that A-Design has borrowed amount to $ 8,000 per year.
1. Calculate the company's net profit for a rate 20% tax. 2. Determine the return on invested capital of the company for its new injection machine. 3. What is the simple return period (in years) for the investment compared to the injection machine? 4. For a unit net profit of $ 20 per armrest, how much armrests must sell A-Design to achieve its breakeven point in relation to the investment? 5. Do a sensitivity analysis of ADesign's net profit for a 15% and 25% tax rate.
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