Apec Analyz

To: Alison Sexton Re: Analyze Investment in a Transshipment Point. This report summarizes finding from analysis of the present grade of an enthronement in leasing a small va providet supermarket and converting it into a transshipment crest for deliveries to customers. On one hand, this action needs initial coronation which is $ 350000 and yearbook cost which is $150000. On the other hand, this rankment sack decrease the spoken communication cost by $7 per delivery. And hindquarters increase the procedure of orders. You ask to analyze whether the company should invest in this transshipment head or not. I analyze this investment funds by calculate the present cheer of this investment. The marginal tax count is 40% and the cost of working neat is 24%. With these data, I make a capital budget analysis table. The capital budget analysis in tabular form is attached as Attachment 1. You say that the useful life of this ease is estimated to be only trio classs, so the period is triad. spiritual rebirth of the va firet supermarket into a transshipment facility will cost $350,000 so the initial investment is $ 350,000. You estimate that with the transshipment point, the cost of delivery can reduce by $7 dollars, and the expected weekly orders for course of instruction 1, year 2 and year 3 are 600, 1400, and 2000 respectively.

So the ramble saving for three years are 600*$ 7*52= $218,400, 1400*$7*52=$509,600 and 2000*$7*52=$728,000 respectively. The annual distribution cost is the annual cost for rent, utilities, and insurance, and it is estimated to be $150,00 0. The see the light coin flow before t! ax is equal to jump saving disconfirming distribution cost, so the net funds flow for three years are $68,400, $359,600 and $578,000 respectively. Because after three years, the facility will have on salvage value for the company, so the annual depreciation is: 350000/3=684000. The change in tax income is equal to net cash flow electronegative depreciation, thus the change is tax income are: -$48,267 $242,933 and$ 46,1333 respectively. The change in tax...If you want to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay