Answer:
The right answer is:
(a) 5916 units
(b) 5046 units
Explanation:
Given:
Sales,
= $59
Variable cost,
= $30
Fixed cost,
= $171,564
Increased sale,
= $64
Now,
(a)
Contribution margin will be:
=
=
= ($)
hence,
Breakeven will be:
=
=
=
(b)
Contribution margin will be:
=
=
= ($)
hence,
Breakeven will be:
=
=
=
Answer:
$489,512.15
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
We are supposed to determine the present value
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = 84,000
Cash flow in year 2 = 113,000
Cash flow in year 3 = 125,000
Cash flow in year 4 = 130,000
I = 6%
PV = 387,739.47
387,739.47(1.06)^4 = $489,512.15
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
