You have as of late been recruited by Intersoll Motors Inc. (IMI) in its moderately new depository the board office. IMI was established eight years prior by Geoff Boycott. Geoff discovered a strategy to produce a less expensive battery that will hold a bigger charge, giving a vehicle controlled by the battery a scope of 700 km prior to requiring a charge. The vehicles produced by IMI are moderate sized and convey a value that permits the organization to contend with other standard automobile makers. The organization is exclusive by Geoff and his family and it had deals of $97 million a year ago. Cost of products sold added up to $80M and devaluation was $2M.

IMI's development to date has come from its benefit. At the point when the organization had adequate capital, it would extend creation. Generally minimal conventional investigation has been utilized in its capital planning measure. Geoff has quite recently found out about capital planning procedure and has come to you for help. First off, the organization has never endeavored to decide its expense of capital, and Geoff might want you to play out the investigation. Since the organization is exclusive and not yet traded on an open market, base all loads on the book esteems rather than the market esteems.

IMI's capital is comprised of a bank credit and proprietor's value. It has a 15-year advance for 8,000,000 with an APR of 12.15% dependent on semi-yearly compounding. IMI has been paying 95,260 month to month for a very long time. The necessary profit from value is 20%. The company's peripheral duty rate is 35% and this is relied upon to proceed uncertainly.

IMI has been investigating some development openings. One freedom that looks encouraging is another production line that can create battery worked Sports Utility Vehicles or SUV's. SUVs are at present extremely well known with youthful families and the segment is relied upon to keep on developing. The issue is that numerous shoppers are not persuaded a battery alone will give the adequate mileage and would favor a half and half of gas/battery. A plant (total with hardware) that could create cross breed SUV's is relied upon to cost $11.5M. All industrial facility and gear costs have a CCA deterioration pace of 20% and a normal rescue worth of $2.17M toward the finish of the task's life in 8 years.

Cross breed SUV's sell for $60,000 with a creation cost of $50,000. Fixed expenses are required to be

$1,500,000 yearly. Net working capital is required to be $200,000 each year all through the undertaking life. IMI hopes to have the option to create and sell 525 SUV's a year the entire undertaking life.

At an executive gathering, the VP of Marketing demonstrates that the organization burned through $150,000 on a showcasing study that decided the normal future consideration deals. The VP of Operations makes reference to that IMI possesses an unfilled distribution center that is presently available for $1,200,000. Rather than selling it, it could without much of a stretch be changed over to another plant, setting aside the undertaking cash. Everybody gestures energetically in understanding. Geoff requests that you decide if the development and its conceivable overhaul choice are a wise speculation for the organization.

For the following three inquiries, expect to be the accompanying: no assessments, devaluation is straight-line, no half-year rule, and rescue is still $2,170,000.

a. What is the money make back the initial investment level of yield for the base instance of this undertaking?

b. What is the bookkeeping earn back the original investment level of yield for this task?

c. What is the monetary equal the initial investment level of yield for this task?

5.1 Price Elasticity of Demand and Price Elasticity of Supply Calculate the price elasticity of demand Question The table shows the price and quantity demanded for floor mats, Using the Midpoint Method, what is the price elasticity of demand between points B and C? Note: Remember to take the absolute value of the result and round to the nearest hundredth. Rounding should be done at the end of your calculation. Point Price Quantity A $10 500 B $13 480 C $16 460 D $19 440 $22 420Assume that the price elasticity of demand, Ed = -0.2. Given a 10% increase in price, there will be a O 20% increase in the quantity demanded 2% decrease in the quantity demanded 20% decrease in the quantity demanded 0.2% decrease in the quantity demanded O 2% increase in the quantity demanded QUESTION 5 If a 10% increase in the price of gasoline results in a 2% decrease in the quantity demanded of gasoline, then the elasticity of demand for gasoline is O equal to 0.2, and demand is inelastic O equal to 0.2, and demand is elastic O equal to 5 and is elastic O equal to five and is inelastic QUESTION 6 If demand is unit elastic, a 25% increase in price will result In a 25 change in total revenue O no change in quantity demanded O a 14 decrease in quantity demanded :a 25% decrease in quantity demandedOne drawback to advertising might be that it could easily (1) cause a monopolistically competitive firm to become a monopoly. 2) raise revenue but not increase demand. 3) decrease revenue and raise demand. (4) decrease costs and decrease demand. 5) raise costs but not increase demand. Question 13 (2 points) Product differentiation 1) is a common characteristic of a perfectly competitive market structure. 2) refers to firms' attempts to make real or apparent differences in essentially substitutable products look different in the minds of consumers. 3) refers to firms' attempts to make their products look the same as other products in the industry. 4) is employed only in a monopoly market structure. 5) refers to the advantage big firms have in research and developmentQuestion 10 2 pts Refer to Figure 2.2.1 above. At a price of $ 1.50, there is: OFan alternative equilibrium between supply and demand. O a surplus of coffee in the market. an excess of quantity demanded over quantity supplied. an excess of quantity supplied over quantity demanded. Question 11 2 pts Refer to Figure 2.2.1 above. If the price of $1.50 is a price imposed by the government, we can call it: a socially optimal equilibrium price. O a price floor. O a fiscal price. a price ceiling