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With a $100,000 investment in a new injection moulding machine, A-Design Inc., a company specialized in the design and manufacturing of armrests for wheelchairs was
With a $100,000 investment in a new injection moulding machine, A-Design Inc., a company specialized in the design and manufacturing of armrests for wheelchairs was able to achieve an operating income of $36,000 in its first year of production/operation. The interest expenses on the money A-Design has borrowed were $5,000 per year. 1. Calculate the net profit of A-Design Inc. for an incom rate of 25%. (2 Marks) 2. Determine the return on investment of A-Design Inc. its new injection moulding machine. (2 Marks) 3. What is the simple payback period (in years) for the injection moulding machine investment? (2 Marks) 4. With a net unit price of $5 per armrest, how many arm must A-Design sell to break-even with respect to the investment? (2 Marks) 5. Perform a sensitivity analysis on the net profit of A-D Inc for an income tax rate of 20% and 30% (2 Marks
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