Gavin Mills has an existing facility that it paid 3 0 , 0 0 0 , 0
Fantastic news! We've Found the answer you've been seeking!
Question:
Gavin Mills has an existing facility that it paid for years ago. It has choices for this facility now: sell it outright for M today, lease it for the next years to a supplier, then sell it at the end of the last year of the lease for M or use it to produce flax seed for years, then sell it at the end of the last year of production for M but it will have to be upgraded today for use at a cost of M not paid under the lease option If it is used by Gavin to produce flax seed it can be sold for $ a bushel with a contribution margin ratio how much the firm keeps after variable costs of production of To operate the plant, Gavin will incur $ per year of fixed costs, regardless of production levels not applicable to the lease Gavin forecasts that it will sell the following bushels in each of the next years: The lease terms would be $M per year plus a $ per year reduction in costs for the supplies Gavin buys from the leasee. Please use a WACC of
What would the CMR have to increase to in order to change the decision? Please consider whole number changes in percent ie to and enter your response in whole numbers with no units ie and NO decimal places: would be
Posted Date: