Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Management Expert

problem:
Looner Industries is considering investing in a new manufacturing plant. The plant requires an item of equipment that costs $200,000. In addition, Looner will spend $10,000 on shipping costs and $30,000 on installation charges. The equipment will be housed in a building currently owned by the company. The building was bought at a cost of $75,000 five years ago, but it could be sold now for $125,000. Similar buildings in the area are leasing for $5,000 per month.

You estimate that if the new plant is constructed, the company will increase its inventories by $25,000, while accounts payable also will rise by $5,000. New sales from the plant are estimated to be 120,000 units per year, at a price of $3.50 per unit. Variable costs are expected to total 60% of sales, while fixed costs are estimated at $20,000 per year. The plant has an estimated economic life of 4 years, after which time it will be scrapped for $25,000 (excluding the building). Depreciation will be find outd using the 3-year MACRS rates of 33%, 45%, 15%, and 7% for the first through the fourth year, respectively. Looner Industries' marginal tax rate is 40%, and its cost of capital is 10%. Should the plant be built?

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M928367
  • Price:- $15

Guranteed 24 Hours Delivery, In Price:- $15

Have any Question? 


Related Questions in Business Management

Assignmentthis assignment will give you the opportunity to

Assignment This assignment will give you the opportunity to choose a case study, and then write about the ethical implications and the impact of the events that are described. Each case study includes a set of questions ...

Q1 what role do retailers and wholesalers play in a

Q1. What role do retailers and wholesalers play in a marketing channel?What impact does retailing have on the Saudi economy? Explain. Q2. What do you mean by Personal Selling? How do companies plan, implement, and contro ...

Assume that the price of competing good b decreases by 5

Assume that the price of competing Good B decreases by 5% and as a result, the quantity demand for Good A decreases by 8%. What is the cross-price elasticity for your product? What type of goods are Good A and Good B?

This assignment will assess learning outcomes1 demonstrate

This assignment will assess learning outcomes 1. Demonstrate a systematic understanding and critical evaluation of the key aspects of the strategic management process; 2. Demonstrate the ability to compare different theo ...

Describe industry standards for protecting data integrity

Describe industry standards for protecting data integrity and for mitigating risks that safeguard health information systems.

Assignmentwomen and accountancy profession in the big4 the

Assignment Women and Accountancy Profession in the Big4: the case of GCC countries A short paragraph of Big 4 in a particular country (including establishment and board of directors list; male and female); Employment law ...

Questions 1-5 should be 150 word minimum 6-7 is a 200 word

Questions 1-5 should be 150 word minimum. 6-7 is a 200 word minimum 1.) Compare and contrast the different types of tribometers. In your opinion which of the tribometers best represents the slip resistance of a surface? ...

Assignmentyou have to watch the up in air movie and based

Assignment You have to watch the UP in Air movie and based on it, answer the below question. When the professor refers to‘you orientation', she means the concept of "you orientation" is the art of truly knowing your audi ...

International business research paperthe company to do the

International Business Research Paper THE COMPANY TO DO THE RESEARCH PARPER ON: ROLLS-ROYCE A 12-15 page research paper (excluding appendices, table of contents, abstract, reference and bibliography) is required. You wil ...

Assume bubba is a risk-averse individual with a concave

Assume Bubba is a risk-averse individual with a concave utility function. He has an 60% chance of being healthy and earning an income of $250,000. He has a 40% chance of being sick and having his income fall to $10,000. ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen