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Yilandwe June 2015-Investment appraisal

YYovani7y ago
Hello Sir, Can you please explain me how to get the contribution figures and also why we should add the Royalty figure again in dollars, Thanks Reynita
John MoffatJohn MoffatTutor7y ago#1
The question says that the contribution is currently $40 per unit. But this if based on the current price charged of $200 per unit. Imoni thinks they can increase the price to $280 per unit - an extra $80. That means that the contribution will increase by $80 also to $120 per unit. The royalty is income to Imoni and therefore needs including in Imonis dollar cash flows.
YYovani7y ago#2
Thank you so much Sir.
John MoffatJohn MoffatTutor7y ago#3
You are welcome :-)
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