You invest $300 dollars every 3 months in a saving account that pays a nominal interest rate of 6% compounded quarterly. In additional, you get a $100 bonus for each year that your savings are untouched. You plan to continue this for 4 years:

i) Draw the cash flow diagram

ii) How much will there be in the account at the end of 4 years.

2. Your company wants to launch a new product. R&D (including prototypes and manufacturing process development will take 1 year and cost $60,000. You will need a special measuring machine, which you will lease at $10,000 per quarter; no other new equipment will be required. Fixed costs (rent, insurance, etc) for the area of the factory where the R&D will be done and the units will be produced is $5000 per quarter. The cost of goods sold (including all materials, power, labor, etc) will be $2000 for each unit. Marketing estimates that they can sell 10 units in the first quarter after launch, ramping up to 15 in second and 20 in future quarters at a price of $8000 each. Stating any assumptions you make:

i) When will the project break even?

ii) Draw a cash flow diagram for 3 years from the start of R&D.

iii) Compute the present worth of the project.

Alpha Geek

(8)

Status NEW Posted 10 May 2017 06:05 PM My Price 17.00

-----------

Attachments

file 1494440780-956333_1_636299351998409922_Transtutotrs.xlsx preview (25 words )

Qu-----------art-----------erA-----------mou-----------nt -----------Dep-----------osi-----------ted-----------Cum-----------ula-----------tiv-----------e D-----------epo-----------sit-----------Cap-----------ita-----------l C-----------ost-----------Lea-----------se -----------Cos-----------t F-----------ixe-----------d C-----------ost-----------sVa-----------ria-----------ble----------- Co-----------st -----------Sal-----------esU-----------nit-----------s S-----------old-----------Net----------- Ca-----------sh -----------Flo-----------wCu-----------mul-----------uat-----------ive----------- Ne-----------t C-----------ash----------- Fl-----------owP-----------res-----------ent----------- Wo-----------rth----------- Ye-----------arP-----------V r-----------ate----------- @ -----------8% -----------per----------- an-----------num-----------Cum----------- De-----------p W-----------ith----------- In-----------t -----------

Not Rated(0)

• Buy Answer