Copy of FCF 9th edition Chapter 11

Copy of FCF 9th edition Chapter 11 - Chapter 11 Problems...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 11 Problems 1-32 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-In" be installed in Excel. To install these, click on the Office button then "Excel Options," "Add-Ins" and select "Go." Check "Analyis ToolPak" and "Solver Add-In," then click "OK."
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 11 Question 1 Input area: Variable material cost $5.43 Variable labor cost $3.13 b. Fixed costs $720,000 Production 280,000 c. Sales price $19.99 Depreciation $220,000 Output area: a. Total variable cost $8.56 b. Total variable cost/year $3,116,800 c. Cash breakeven 62,992.13 Accounting breakeven 82,239.72
Background image of page 2
Chapter 11 Question 2 Input area: Variable material cost $24.86 Variable labor cost $14.08 Sales price $135.00 Production 120,000 Fixed costs $1,550,000 Extra order 5,000 Output area: Total costs $6,222,800 Marginal cost $38.94 Average cost $51.86 Minimum acceptable revenue $194,700 Additional units should be produced only if the cost of producing those units can be recovered.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 11 Question 3 Input area: Price/unit $1,900 Variable cost/unit $240 Fixed costs $4,800,000 Quantity 95,000 Price accuracy 15% Variable cost accuracy 15% Fixed cost accuracy 15% Quantity accuracy 15% Output area: Scenario Unit sales Unit price Unit variable cost Fixed costs Base case 95,000 $1,900.00 $240.00 $4,800,000 Best case 109,250 $2,185.00 $204.00 $4,080,000 Worst case 80,750 $1,615.00 $276.00 $5,520,000
Background image of page 4
Chapter 11 Question 4 Output area: An estimate for the impact of changes in price on the profitability of the project can be found from the NPV at any two different price levels and forming the ratio of the changes in these parameters. Whenever a sensitivity analysis is performed, all other variables are held constant at their base-case values the sensitivity of NPV with respect to price: NPV/ P. This measure can be calculated by finding
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 11 Question 5 Input area: Initial cost $724,000 Project life 8 Units sales 90,000 Price/unit $43.00 Variable cost/unit $29.00 Fixed costs $780,000 Tax rate 35% Required return 15% b. New quantity for calculation 95,000 Projected sales change (500) c. New VC for calculation $30.00 Projected VC change $(1.00) Output area: a. Depreciation per year $90,500 Accounting breakeven 62,179 DOL 9.619 b. Base OCF $343,675 Base NPV $818,180.22 New quantity 95,000 OCF $389,175 NPV $1,022,353.35 $40.835 For a sales change of (500) the NPV would change $(20,417.31) c. New variable cost $30.00 OCF $285,175 $(58,500.00) If variable costs change by $(1.00) then OCF would change by $58,500.00 NPV/ Q OCF/ VC
Background image of page 6
Chapter 11 Question 6 Input area: Initial cost $724,000 Project life 8 Units sales 90,000 Price/unit $43.00 Variable cost/unit $29.00 Fixed costs $780,000 Tax rate 35% Required return 15% Price uncertainty 10% Quantity uncertainty 10% Variable cost uncertainty 10% Fixed cost uncertainty 10% Output area:
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 29

Copy of FCF 9th edition Chapter 11 - Chapter 11 Problems...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online