PPT Slide
Equations for Sales Price and Investment Decisions
Volume = 15,000 * (1+Mkt Growth) - 6,666 * Sales Price
Unit Cost = 1.3 - .00009 * Investment
Net Sales = Sales Price * Volume
Direct Costs = Unit Cost * Volume
Mfg Overhead = .1 * Net Sales
Cost of Sales = Mfg Overhead + Direct Costs
Gross Profit = Net Sales - Cost of Sales
Depreciation = Function(Investment)
Admin Expenses = .04 * Net Sales
Net Before Tax = Gross Profit - Admin Expenses - Depreciation
Net After Tax = (1-Tax Rate) * Net Before Tax
Rate of Return = Function( Net After Tax, Depreciation, Investment)