Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Q1(Inflation and project cash flows)
Carlyle Chemicals is evaluating a new chemical compound used in the manufacturing of a wide range of consumer products. The firm is concerned that inflation in the cost of raw materials will have an adverse effect on the projects cash flows. Specifically, the firm expects the cost per unit (which is currently $0.85) will rise at a rate of 12% annually over the next three years. The per-unit selling price is currently $0.95 and this price is expected to rise at a meager 3% annual rate over the next three years. If Carlyle expects to sell 5.5, 7.2, and 9.5 million units for the next three years, respectively, what is your estimate of the gross profits to the firm? Based on these estimates, what recommendation would you offer to the firm's management with the regard to this product? (Note: be sure to round each unit price and unit cost per year to the nearest cent)
The gross profit or (loss) for year 1 is $___ (round to the nearest dollar)
The gross profit or (loss) for year 2 is $___ (round to the nearest dollar)
The gross profit or (loss) for years 3 is $___ (round to the nearest dollar)

Q2 (Inflation and project cash flows)
Carlyle Chemicals is evaluating a new chemical compound used in the manufacturing of a wide range of consumer products. The firm is concerned that inflation in the cost of raw materials will have an adverse effect on the projects cash flows. Specifically, the firm expects the cost per unit (which is currently $0.86) will rise at a rate of 11% annually over the next three years. The per-unit selling price is currently $0.96 and this price is expected to rise at a meager 3% annual rate over the next three years. If Carlyle expects to sell 5.5, 6.8, and 10 million units for the next three years, respectively, what is your estimate of the gross profits to the firm? Based on these estimates, what recommendation would you offer to the firm's management with the regard to this product? (Note: be sure to round each unit price and unit cost per year to the nearest cent.)
The gross profit or (loss) for year 1 is $___ (round to the nearest dollar)
The gross profit or (loss) for year 2 is $___ (round to the nearest dollar)
The gross profit or (loss) for years 3 is $___ (round to the nearest dollar)

Q 4 As a project manager, what general categories of information would you want to have on a cost control report to properly evaluate what you think is a developing overrun on an operation? Why?

Q 4 We typically think of labor as a variable cost; however it can also be a fixed cost or a step cost. Under what circumstances can labor cost be a fixed or step cost?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M926220

Have any Question? 


Related Questions in Basic Finance

Briefly explain in which of the following situations moral

Briefly explain in which of the following situations moral hazard is likely to be less of a problem. a. A manager is paid a flat salary of $150,000. b. A manager is paid a salary of $75,00 plus 10% of the firm's profits.

1 describe the actions you will take ie increasing

1. Describe the actions you will take (i.e., increasing deductions or reducing gross income) to achieve tax savings in the present year. 2. Detail the means by which you will reduce your tax liability in the future (i.e. ...

Wfm current dividend per share is 107 you expect dividends

Wfm current dividend per share is $1.07. You expect dividends to grow at 5% per year into perpetuity. Wfm beta is .85. The current risk free rate is 2.9%, and the expected return on the market portfolio is 7.4%. Use the ...

Identify the three parties involved in any credit

Identify the three parties involved in any credit derivatives transaction and describe how they differ in their roles and responsibilities with regard to the transaction ? If a portfolio of derivatives is delta hedged by ...

A convertible bond is a bond that permits the holder to

A convertible bond is a bond that permits the holder to turn in the bond and convert it into a certain number of shares of stock. Conversion would, thus, occur only when the stock does well. As a result of the option to ...

Explain why examining the earnings quality is important in

Explain why examining the earnings quality is important in valuation even though one uses cash flows for valuing projects and firms.

In july 2010 congress was considering having the federal

In July 2010, Congress was considering having the federal government set up a "lending fund" for small banks. The U.S. Treasury would lend the funds to banks. The more of the funds the banks loaned to small businesses, t ...

1 how is performance management at dmg world media

1. How is performance management at dmg world media different from traditional performance management systems at other companies? 2. What was the impetus for developing a different performance management system at dmg wo ...

Problem suppose the us dollar and euro interest rate for

Problem: Suppose the US dollar and Euro interest rate for the next one year are 1.5% and 2%, respectively. Both are annually compounded. The spot price of Euro is $1.3000, and the one-year forward price of Euro is $1.290 ...

Why should capital budgeting for projects in an overseas

Why should capital budgeting for projects in an overseas subsidiary be assessed from the parent's perspective rather than just the subsidiary's cash flow perspective? What additional factors deserve consideration in mult ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro