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    Eng Manage

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    mhayebaylon25

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    © All Rights Reserved
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    Eng Manage

    Uploaded by

    mhayebaylon25
    5 views4 pages

    Original Title

    Eng manage

    Copyright

    © © All Rights Reserved

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    DOCX, PDF, TXT or read online from Scribd

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    5 views4 pages

    Eng Manage

    Uploaded by

    mhayebaylon25

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 4

    Franzess Mhaye C.

    Baylon ChE-3

    1.)

    Investment = 4,000,000 (capital)

    Operating expenses

    Materials 1,600,000 per year

    Labor 2,800,000 per year

    Over head 400,000 + 10% sales (0.1 x 8,000,000)

    = 1,200,000

    Selling expenses = 600,000 per year

    Total operating expenses = 6,200,00 per year

    Saving by giving up his job

    Labor cost 400,000

    Material cost 280,000

    Over head cost 320,000

    Total savings = 1,000,000

    Total operating expenses after removing savings =5,200,00

    Total annual cost

    5,200,000 + salary (2,160,000)

    = 7,360,000

    Total profits = 8,000,000 – 7,360,000

    = 640,000

    ROR= Profit / Investment

    = 640,000 / 4,000,000

    = 0.16 < 20 % EXPECTED

    16 % THE MAN SHOULDN’T INVEST

    2.)

    Total money invested

    Land cost 15,000,000

    Building cost 30,000,000

    Equipment cost 12,500,000


    Working capital 5,000,000

    Annual disbursement 23,750,000

    = 86,250,000

    Minimum return of 25 % = ( 86,250,000 / 100 ) 25

    = 21,562,500

    Return required = 86,250,000 + 21,562,500

    = 107,812,500

    Return after 12 years

    Land cost 25,000,000

    Building cost 12,000,000

    equipment 250,000

    = 42,250,000

    Return expected from sales

    107,812,500 - 42,250,000

    = 65,562,500

    Minimum annual sales to justify the statement

    65,562,500 / 12

    = 5,463,541.667

    5,463,541.667 MINIMUM SALES FOR 12 YEARS TO GET 25% MINIMUMRETURN.

    ROR = current value – original value / original value AW

    = ( 107,812,500 -86,250,000 ) / 86,250,000 annual revenue 65,,562,500

    = 0.25

    annual disbursement 23,750,000

    interest on capital (107,812,500 / 100) 25 21,562,500

    = 45,312,500

    Excess 20,250,000
    3.)

    Saving amount = 1,000,000

    Annual dividend 15% (1,000,000 / 100) 15

    = 1,150,000

    Earning from recent job 25,000

    Mechanics 2 x 400 x 300 = 240,000

    Helper 8 x 200 x 300 = 480,000

    Rent 30,000 x 12 = 360,000

    Misc 25,000 x 12 = 300,000

    Required profit 20% (1,150,000 / 100) 20

    = 230,000

    Gross income = expenses + services + profit

    =1,610,000

    1 % sales tax (1,610,000 /100 )1 = 16,100

    2 % insurance (1,610,00/100)2 =32,200

    Total cash flow required for 1 year = gross income + sales tax + insurance

    = 1,658,300

    Average charge on 1 car 1,000

    Total number of cars required to service to get a 20 % profit

    1,658,300 / 1,000

    = 1,658.3

    1,6599 to get 20% profit

    ROR = ( 1,658,300 – 1,380,000) / 1,380,000

    = 0.20

    AW

    Annual revenue 1,659,000

    - 1,658,300

    EXCESS = 700
    4.)

    Annual cost for electric energy = 600,000 KWh

    ( P 2.00 / KWh )

    = 1,200,000

    Annual cost for power plant

    Maintenance 800,000

    Other expenses 100,000

    Tax and Insurance (2,000,000 /100) 6

    = 120,000

    Depreciation ( Co – Cl ) i /( 1 + i ) -1

    = ( 2,000,000-200,000) 0.15 / (1 + 0.15 )^15 -1

    = 37,870.703

    Total annual cost maintenance + other expenses + tax and insurance + depreciation

    = 1,0577,830.703

    Annual net savings annual cost for electric energy - annual cost for power plant

    = 1,200,000 -1,057,830.703

    = 142,169.297

    ROR = annual net savings / capital

    = 142,169.305 / 2,000,000

    = 0.0711

    7.11% NOT A GOOD INVESTMENT

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