Tuesday
October 21, 2014

Homework Help: Managerial Economics

Posted by Karen on Tuesday, December 14, 2010 at 5:18pm.

You are considering setting up a software development business. To set up the enterprise you will need to buy equipment costing $100,000. This equipment will be depreciated straight line over 5 years to a zero salvage value. Its market value at the end of the 5 years will be zero. You will need to rent space at $5,000 per year for the five years of the project. You will also need to hire 5 software engineers at $50,000 each, per year to work in this project. Marketing and selling costs will be $100,000 per year during the project. Materials costs are $20 per unit. You expect to sell 6,000 units of the product each year for the five years. If your tax rate is 40%, and you require a return of 12%, what is the minimum price you should charge per unit of the product?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

accounting - Jackson Company invests in a new piece of equipment costing $40,000...
Finance - Delta Software is considering a new project whose data are shown below...
Finance - Delta Software is considering a new project whose data are shown below...
accounting - You trade equipment in 2010 and pay a $10,000 cash boot for similar...
Finance - You need to buy 20 computers for your business. You have the option of...
accounting and taxes - I recently closed my retail business which was very small...
Finance - Dr. Whitten has decided to purchase equipment that has a cost of $60,...
finance - The equipment that would be used has a 3-year tax life, after which ...
Business - What is the net present value (NPV) of this replacement project? The ...
Accounts - I have a question and I need to prepare the final accounts. In the ...

Search
Members