- This topic has 3 replies, 2 voices, and was last updated 6 years ago by
John Moffat.
John Moffat.Viewing 4 posts - 1 through 4 (of 4 total)
-
Posts
-
dev66
- Topics: 13
- Replies: 6
- ☆
I don’t get in the above question how they reach the figure of $120 + inflation per unit in the Contribution for part sales in the latter part of the NPV calculation.
The question states Imoni Co will get a pre-taxed contribution of $40 for each unit. Where does $120 come from? I get how they get the rest of the figures for the contribution line just not the $120!
John Moffat
- Topics: 57
- Replies: 50594
- ☆☆☆☆☆
Currently they are selling at 200 and earning a contribution of 40. So the cost must be 160.
In future they will sell at 280, and so with a cost of 160 it means that the new contribution will be 120 🙂
dev66
- Topics: 13
- Replies: 6
- ☆
Thank you!
John Moffat
- Topics: 57
- Replies: 50594
- ☆☆☆☆☆
You are welcome 🙂
John MoffatViewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.