Conch Republic Electronics Minicase

Conch Republic Electronics Minicase - Matthew Kocovic,...

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Matthew Kocovic, Toni-Ann Lena, Kristoffer Carseni, Troy Orlando Conch Republic Electronics Mini-Case (CH.10) -Spent $750,000 to develop a new PDA -Spent an additional $200,000 for marketing study to determine the expected sales. -Can manufacture the new PDA with variable cost for $155.00 each. -Fixed Costs for the operation are estimated at $4.7 million per year. -Unit Price $360.00 each -Necessary equipment to produce the PDA will cost $21.5 million, with depreciation for 7 years (MACRS Schedule) -It is believed that this equipment after 5 years will be worth $4.1 million. -NWC will be 20% of Sales -Changes in NWC will occur in Year 1, with the first year sales. -Conch Republic Corporate Tax Rate is 35% and has a 12% required return. -Estimated sales volume per year is: 1. 74,000 2. 95,000 3. 125,000 4. 105,000 5. 80,000 Depreciation: Year 1 2 3 4 5 6 7 8 Depreciation Rate 0.143 0.245 0.175 0.125 0.089 0.089 0.089 0.045 Cash Flows: Year 0 1 2 3 4 5 Sales Volume 74,000 95,000 125,000 105,00
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This note was uploaded on 05/09/2011 for the course FIN 101 taught by Professor Cho during the Spring '08 term at NYU.

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Conch Republic Electronics Minicase - Matthew Kocovic,...

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