Lesson #5, Assignment #6

# Lesson #5, Assignment #6 - Chapter 11 Conch Republic...

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Chapter 11 Conch Republic Electronics, Part 2 Input Area: Equipment \$21,500,000 Salvage value \$4,100,000 \$750,000 sunk cost Marketing study \$200,000 sunk cost Year 1 Year 2 Year 3 Sales(units) 74,000 95,000 125,000 Depreciation rate 14.29% 24.49% 17.49% Sales of old PDA 80,000 60,000 Lost sales 15,000 15,000 Price \$360 VC \$155 FC \$4,700,000 Price of old PDA \$290 Price reduction of old PDA \$35 VC of old PDA \$120 Tax rate 35% NWC percentage 20% Required return 12% Sensivity analysis New price \$370 Quantity change 100 NOTE: Change in units per year Output Area: Question 1: Sensitivity to change in price Sales Year 1 Year 2 Year 3 New \$27,380,000 \$35,150,000 \$46,250,000 Lost sales 4,350,000 4,350,000 Lost rev. 2,275,000 1,575,000

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Net sales \$20,755,000 \$29,225,000 \$46,250,000 VC New \$11,470,000 \$14,725,000 \$19,375,000 Lost sales 1,800,000 1,800,000 \$9,670,000 \$12,925,000 \$19,375,000 Sales \$20,755,000 \$29,225,000 \$46,250,000 VC 9,670,000 12,925,000 19,375,000 Fixed costs 4,700,000 4,700,000
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## This note was uploaded on 04/29/2011 for the course FINANCE BA521 taught by Professor Mark during the Spring '11 term at Antelope Valley College.

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Lesson #5, Assignment #6 - Chapter 11 Conch Republic...

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