(MUST SHOW ALL WORK)

In this assignment explain and show the details of all your calculations (typing them). If the details are not shown you will not receive any marks. Handwritten responses will not be accepted. Wherever you feel an interest calculation is required, assume the rate of interest to be 10%. Information: 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 Passive resistors Active IC's Cabinet Speakers /accessories 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 John's 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. Q7: Assume the production level of 1400 computers per year. John finds that he has to maintain an average component inventory equal to 2 month's production, finished goods in warehouses amount to three month's production, payments are made by dealers and distributors two and a half months after purchase. The annual rate of interest relevant to John's 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. In this assignment explain and show the details of all your calculations (typing them). If the details are not shown you will not receive any marks. Handwritten responses will not be accepted. Wherever you feel an interest calculation is required, assume the rate of interest to be 10%. Information: 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 Passive resistors Active IC's Cabinet Speakers /accessories 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 John's 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. Q7: Assume the production level of 1400 computers per year. John finds that he has to maintain an average component inventory equal to 2 month's production, finished goods in warehouses amount to three month's production, payments are made by dealers and distributors two and a half months after purchase. The annual rate of interest relevant to John's 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