Answer:

$(-1,578)$

Question $25$

$($Estimated time allowance: $18$ minutes$)$ Compute the EBIDTA. Fanzy corp. has decided to sell a

new line of TVs$.$ The firm has also spent $$2$ million in research and development for the new TVs$.$

It is estimated that the new TVs will sell for $$800$ per unit and have a variable cost of $$420$ per

unit. The firm has spent $$450,000$ in market research for these new TVs$.$ It is concluded in this

study that the firm can easily sell $140,00TV$ T in each of the following ten years. As part of the

research, it was found that the firm is very likely to lose sales of $22,000$ units of its existing high$-$

priced TVs$.$ These TVs currently sell for $$1000$ each and have variable costs of $$510.$ On the

positive side, the study also revealed that the firm will increase sales of its cheap TVs by $24,000$

units. The cheap TVs sell for $$290$ and have variable costs of $$120$ per set. The fixed costs each

year will be $$24$ million. The corporate tax rate is $20\%.$ You can use a shell formatted excel for this

problem by clicking here

Enter your answer en millions, e$.$g$.$ if you obtain $$2,300,000$ then enter $2\mathrm{.}30$ ; if your answer is

$$3,000,000$ then enter $3\mathrm{.}00$

The annual earnings before interests, taxes, depreciation and amortization $($EBIDTA$)$ is

Answer: