1

0 1 2 3 4
Sales 4200000 4200000 4200000 4200000
VC -1680000 -1680000 -1680000 -1680000
FC -315000 -315000 -315000 -315000
Equipment -1250000 62500
Depreciation 53571.429 53571.429 53571.429 53571.429
NWC -1150000 -350000 1500000
-2400000 1908571.429 2258571.429 2258571.429 3821071.429
1 0.78125 0.6103515625 0.4768371582 0.3725290298
-2400000 1491071.42891 1378522.600708 1076970.7818 1423460.03242

2
1072.5
-643.5
35
464

Opportunity Cost 6400000

Plant 14200000
Grading 890000
21490000

4
Unit Price Total
Motor homes 4500 53000 238500000
Motor coaches -900 91000 -81900000
Portable 19000 13000 247000000
403,600,000.00

5
0 1 2 3
Investment -3900000
Sales 1722500 1722500 1722500
Cost -546000 -546000 -546000
455000 455000 455000
-3900000 1631500 1631500 1631500
1 0.8928571429 0.7971938776 0.7117802478
-3900000 1456696.42857 1300621.811224 1161269.47431 18587.7141035

6
0 1 2 3 4
185000x 185000x 185000x 185000x
Equip (940,000.00)
Fixed cost (198,250.00) (198,250.00) (198,250.00) (198,250.00)
Variable cost (1,112,312.50) (1,112,312.50) (1,112,312.50) (1,112,312.50)
NWC (75,000.00)
Depreciation 65,800.00 65,800.00 65,800.00 65,800.00
(1,015,000.00) (1,244,762.50) (1,244,762.50) (1,244,762.50) (1,244,762.50)
1.00 0.89 0.80 0.71 0.64
(1,015,000.00) (1,111,395.09) (992,317.04) (885,997.36) (791,069.07)

0 = -5433715.3 + PV185000x
0 = -5433715.3 + (3.604776)(185000)x
5433715.3 = 666883.56x
x = 8.14
sales price = 8.14/.65
12.5230769231

A 0 1 2 3 4
Investment -430000
Operating Cost -72600 -72600 -72600 -72600
Depreciation benefit 36550 36550 36550 36550
-430000 -36050 -36050 -36050 -36050
1 0.9009009009 0.8116224332 0.7311913813 0.6587309741
-430000 -32477.4774775 -29258.9887184 -26359.4492959 -23747.2516179
B
0 1 2 3 4
Investment -570000
Operating Cost -64680 -64680 -64680 -64680
Depreciation benefit 32300 32300 32300 32300
-570000 -32380 -32380 -32380 -32380
1 0.9009009009 0.8116224332 0.7311913813 0.6587309741
-570000 -29171.1711712 -26280.3343884 -23675.9769265 -21329.7089428

EAC-A = 541843.17/3.10 = 174,788

EAC-B = 706985/4.23 = 167,136

CHALLENGE PROBLEM

0 1 2 3 4
Sales 17500x 17500x 17500x 17500x
Equipment (3,400,000.00) 165,000.00
NWC (95,000.00) 95,000.00
Fixed cost (360,000.00) (360,000.00) (360,000.00) (360,000.00)
VC (2,152,500.00) (2,467,500.00) (2,677,500.00) (2,362,500.00)
Additional Sales 513,000.00 1,026,000.00 1,368,000.00 855,000.00
Depreciation 340,000.00 340,000.00 340,000.00 340,000.00
(3,495,000.00) (1,659,500.00) (1,461,500.00) (1,329,500.00) (1,267,500.00)
1 0.8849557522 0.7831466834 0.6930501623 0.6133187277
(3,495,000.00) (1,468,584.07) (1,144,568.88) (921,410.19) (777,381.49)

100000 = -7806944.63 + PV17500x

100000+7806944.63 = (2.97447)(17500x)
7906944.63 = 52053.23x
x = 151.90

Unit sales = 151.9/.60

Unit sales = 253.17
Cost 1250000 6000000
AD 714285.714286 1500000
CV 535714.285714
SP 625000
Gain 89285.7142857

2970024.84384

5
185000x
 45,500.00
(198,250.00)
(1,112,312.50)
75,000.00
65,800.00
(1,124,262.50)
0.57 3.60
(637,936.74) (5,433,715.30)

-541843.16711 NPV

5 6

-64680 -64680
32300 32300
-32380 -32380
0.5934513281 0.5346408361
-19215.9540025 -17311.670273 -706985 NPV

1 2 3 4
17500 17500 17500 17500
3000 6000 8000 5000
20500 23500 25500 22500
2.9744713255
(7,806,944.63)