The annual product release now evaluated

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Uploaded: 11.09.2013
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1. Problem №5.
The annual product release now estimated at 10,000 units. The product is sold at 30.00 per unit. As a result of market research on the market value of 40000.00, there is still pent-up demand for 10,000 units of the product.
The company is considering an investment project to increase the production of the product with a planning horizon of five years.
The company has reserves of infrastructure to accommodate additional equipment. The necessary equipment can produce, deliver and install the two companies - the manufacturer 1 and manufacturer 2 Economic Characteristics equipment options are summarized in the following table:
Index Manufacturer 1 Manufacturer 2
The cost of equipment, delivery and installation of 20 000.00 25 000.00
The normative lifetime, July 6 years

The magnitude of the additional volume of working capital otseniva¬etsya to 7000.00. It is expected that upon completion of the project it will be possible to recover 90% of the cost of establishing working capital.
Acquisition of the equipment can be carried out at the expense of its own capital, which is estimated at 25%, or by using the leasing scheme with annual lease payments of 20% of the purchase cost of the equipment over five years.
The company uses the straight-line method of depreciation.
1. Develop a model cash flow and assess the cost-effectiveness of design options when choosing different types of equipment and schemes of purchase. Convincingly prove the pre-property better option.
2. Determine how to change the investment attractiveness of the vari-Ants project if to accommodate the new equipment, the company will have to at their own expense to perform the following investment plan for the construction of a new production-tion of the case:
Type of work Period Cost
Zero-cycle construction 0100 000.00
Construction engineering building 1 150 000,00

2. Problem №8
The company produces two products with the following economic indicators:
Index Product 1 Product 2
Revenue for the year 300,000.00 350,000.00
Fixed costs 30,000.00 50,000.00
Variable expenses 75,000.00 100,000.00
The company has built a production building and is considering options for its use: leasing, development of additional production of the product 1, the establishment of additional production of the product 2.
It is possible to deliver the building for rent for five years with an annual payment of 150,000.00.
Costs for the organization of production and the possible selling price of equipment in the context of products are estimated as follows:
Index Product 1 Product 2
The cost of equipment 700,000.00 800,000.00
Additional working capital 100,000.00 120,000.00
Realizable value of the equipment after five years of exploitation-of 100,000.00 80,000.00

After five years of operation of the equipment can be realized.
The company uses the straight-line method of depreciation.
The tax rate for companies is 30%, the cost of capital - 20%.

1) Develop a cash flow model and assess the economic efficiency of the project.

Additional information

Examination №1
on discipline "Theory of Investment"
Option №5

3. Test
№ 5. Under alternative (imputed) costs (Opportunity Cost) should be understood:
1) the possible loss of profits from the use of assets or resources for other purposes
2) the price of the replacement of one or the other benefits cost of production, measured in terms of lost (missed) opportunities of production of another type of goods, services that require similar overhead
3) are interchangeable in the production process costs of implementing inve-vestment project
4) internal reserves to reduce costs of the organization.
№ 8. From the effects of the inflation rate of more reserved:
1) foreign investment
2) financial investments
3) mixed investment
4) real investments


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