Q1 a)The company specializes in office multi-media systems and can produce at most 820 units per month. Its current monthly production variables are a fixed cost of $55,000, a constant average variable cost of $2, 255 per unit, and a selling price of $2, 500 per unit. What is the maximum monthly profit for the company?
Q1
a)The company specializes in office multi-media systems and can produce at most 820 units per month. Its current monthly production variables are a fixed cost of $55,000, a constant
b)As an staff at company, you are considering two projects which project A has an initial investment of $100,000 and yearly revenue of $17, 600 for 10 years, and Project B has an initial investment of $51,000 and yearly revenue of $10, 100 for 10 years.
What is the point of indifference? Which project would you accept at a WACC of 16.0%?
a) Point of indifference does not exist, accept project B
b)Point of indifference at 8.60%, accept both Project A and Project B
c) Point of indifference at 8.60%, don't accept Project A and don't accept ProjectB
d) Point of indifference at 14.84%, accept Project B.
e) Point of indifference at 11.86%, accept Project B
f)Point of indifference at 11.86%, accept Project A
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