Your company makes widgets. The fixed cost incurred (regardless of the number of widgets produced) each year
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Your company makes widgets. The fixed cost incurred (regardless of the number of widgets produced) each year is $80,000. The variable cost per widget is $0.25. The sale price of each widget is $1.00. The price and costs are expected to remain unchanged over time. In year 1, the company expects to sell 100,000 widgets. You expect your sales to increase at a rate of 4% per year forever. The discount rate is 10%. Ignore taxes. What is the value of this company?
Related Book For
Operations Management in the Supply Chain Decisions and Cases
ISBN: 978-0073525242
6th edition
Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein
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