Exercise 2 ABC Company would like to invest on a plant worth 7500 today. The company...

 

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Exercise 2 ABC Company would like to invest on a plant worth 7500 today. The company uses straight line depreciation, and the plant will not have salvage value after 3 years. The marketing and production departments forecast the information in the table below. Sales quantity (unit sales) Unit price (P) Per unit variable cost (VC) Total fixed costs (FC) Tax rate Calculate the cash flows and NPV given that the discount rate=10%. a/ Total revenue b/ Total variable costs c/ Annual depreciation d/ Pretax profit I 1,000 pieces $80 $60 $1,000 40% MaaRoelo fra (1 Mark) (1 Mark) (1 Mark) (2 Marks) Exercise 2 ABC Company would like to invest on a plant worth 7500 today. The company uses straight line depreciation, and the plant will not have salvage value after 3 years. The marketing and production departments forecast the information in the table below. Sales quantity (unit sales) Unit price (P) Per unit variable cost (VC) Total fixed costs (FC) Tax rate Calculate the cash flows and NPV given that the discount rate=10%. a/ Total revenue b/ Total variable costs c/ Annual depreciation d/ Pretax profit I 1,000 pieces $80 $60 $1,000 40% MaaRoelo fra (1 Mark) (1 Mark) (1 Mark) (2 Marks)