Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Klaatu Co. has recently completed a $300,000, two-year marketing study. Based on the results. Klaatu has estimated that 10,000 of its new RUR-class robots could be sold annually over the next eight years at a price of $10,115 each. Variable costs per robot are $7,900; fixed costs total $11.7 million per year. Starts up costs include $41 million to build production facilities, and 9 million in net working capital. The $41 million facility is made up of a building valued at 6 million that will belong to CCA class 3 (rate is 5%) and $35 million of manufacturing equipment (belonging to CCA class 8 with rate of 20%). At the end of the project`s life, the facilities will be sold for an estimated $10.1 million, assuming the building`s value will be $4 million and net working capital will be recovered .When this project is over, there will still be other assets in the CCA class. Klaatu pays taxes at a 37% and uses a 15.5 percent discount rate on projects such as this one. Should Klaatu produce the RUR-class robots?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M940494

Have any Question? 


Related Questions in Basic Finance

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 ...

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 explain why dollar returns and percentage returns can

1. Explain why dollar returns and percentage returns can sometimes send conflicting signals when comparing two different investments. 2. Do the rankings of investment alternatives depend on whether we rank based on nomin ...

1 how do inflationary expectations influence interest rates

1. How do inflationary expectations influence interest rates on mortgage loans? 2. How does the price level adjusted mortgage (PLAM) address the problem of uncertainty in inflationary expectations? What are some of the p ...

How are the payment terms of an fra different from those of

How are the payment terms of an FRA different from those of most other interest rate derivatives? Explain how FRAs are like swaps and how they are different? Compare the use of interest rate options with forward rate agr ...

Why is there a doppler effect when the source of sound is

Why is there a Doppler effect when the source of sound is stationary and the listener is in motion? In which direction should the listener move to hear a higher frequency? A lower frequency?

You buy a stock for 35 per share one year later you receive

You buy a stock for $35 per share. One year later you receive a dividend of $3.50 per share and sell the stock for $30 per share. 1.What is your total rate of return on this investment?. 2.What is your capital gain or lo ...

As in ada suppose that each expression must have a unique

As in Ada, suppose that each expression must have a unique type, but that from a subexpression, by itself, all we can deduce is a set of possible types. That is, the application of function E1 to argument E2, represented ...

1 what is the significance of the passive activity loss

1. What is the significance of the passive activity loss limitation (PAL) rules for real estate investors? 2. What factors affect a property's projected NOI? 3. ARGUS. Refer to the Monument Office Building example. Suppo ...

Suppose the call price is 1420 and the put price is 930 for

Suppose the call price is $14.20 and the put price is $9.30 for stock options where the exercise price is $100, the risk-free interest rate is 5 percent (continuously compounded), and the time to expiration is 1 year. Ex ...

  • 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