A young college student John, decides to make computers in a small workshop. A single computer consists of the following components, that cost the amounts given: Components Cost in $ per computer Picture tube for monitor: 20 Bare chassis 15 Passive resistors 25 Active ICs 70 Cabinet 40 Speakers /accessories 20 Other Costs and Expenses: In addition to the above part and component costs: John has one engineer (whom he cannot do without), and pays $ 24,000 a year for his services. This engineer has been employed on a five year contract, that cannot be breached. John also has rented the workshop with a lease that cannot be broken, paying $6,000 a year as rent. Assume Johns venture has no other annual costs. As initial investment, John has also spent $ 100,000 on manufacturing plant and equipment that should be usable for a period of five years

Q4: What should John price the computer at if he wishes to make a profit of 10%, as a percentage of sales. [ This is also simply referred to as markup or markup on sales]. John is selling 300 computers in a year

Q7: Assume the production level of 1400 computers per year. John finds that he has to maintain an average component inventory equal to 2 months production, finished goods in warehouses amount to three months production, payments are made by dealers and distributors two and a half months after purchase. The annual rate of interest relevant to Johns business is 10%. Now what is the break even price for John?

Q8: John plans to introduce a product in the Florida market to do this he expects to invest $ 300,000 on a building that has a resale value of $ 200,000 after five years, his revenues are expected to be $ 100,000 per year and costs are $40,000 by the end of the first year, $ 45,000 for the next year, and $30,000 per year for the remaining three years. Calculate the NPV of the Florida project, if the discount rate or rate of interest is 10% annually.