

2173 Salk Avenue, Suite 250 Carlsbad, CA

οƒ 

support@assignmentprep.info

Consider a project of manufacturing and selling high-end smartwatches to wealthy

April 13, 2024

Consider a project of manufacturing and
selling high-end smartwatches to wealthy customers. The length of the project
is 10 years. The industry demand for high-end smartwatches next year will be 1
million units, and every year it will either increase by 3% (with 50%
probability) or decrease by 3% (with 50% probability). Your market share next
year will be 5%, and every year it will either increase by 1%-point (with 50%
probability) or decrease by 1%-point (with 50% probability), but your maximum
capacity of annual production is 100,000 watches per year. (I.e., if your
market share would grow to a level which would require producing more than
100,000 watches per year, it will be capped at the level corresponding to
100,000 watches per year. Then, next year, it will again either increase by
1%-point or decrease by 1%-point, with the same capacity constraint being in
effect.) The initial cost of the project is $10 million, which is used to
purchase the equipment necessary to manufacture smartwatches. This initial cost
is amortized over a 5-year period using the straight-line method. Every year,
the annual inflation will be either 1% (with 50% probability) or 2% (with 50%
probability). In the first year, fixed costs will be $100,000, and every year
they will increase by the inflation. In the first year, variable costs will be
$200 per unit, and every year they will increase by the inflation. If your
market share drops to 0%, you abandon the project and sell your equipment for
its book value or 20% of its initial price (whichever is higher). At the end of
the 10th year, you sell the equipment for 20% of its initial price (if you have
not sold it earlier already). The price at which you can sell the watches
depends on the industry-wide demand in that year (a higher demand leads to a
higher price). Namely, the price per unit is equal to π‘–π‘›π‘‘π‘’π‘ π‘‘π‘Ÿπ‘¦ π‘‘π‘’π‘šπ‘Žπ‘›π‘‘ 4000 + π‘₯ , where π‘₯ is a random number taking a value in the interval [βˆ’50,50] and it
follows a uniform distribution (i.e., it takes all value within the given
interval with equal likelihood). In any case, the unit price never drops below
the actual variable costs per unit. (I.e., if the unit price would be lower
than the variable costs per unit based on the above formula, then the unit
price will be equal to the variable costs per unit.) The corporate tax rate is
25%. Assume that every payment and cash flow happens at the end of the year.
1.Β 
Assume that the project is financed by
equity only. Simulate a random outcome where you calculate the total cash flow
of the project for each year (from the 1st to the 10th year). Then, simulate
altogether 30,000 such random outcomes. Then, calculate the expected cash flow
for each year. Using these expected cash flows, calculate the internal rate of
return (IRR) of the project.

Struggling With a Similar Paper? Get Reliable Help Now.

Delivered on time. Plagiarism-free. Good Grades.

What is this?

It’s a homework service designed by a team of 23 writers based in Carlsbad, CA with one specific goal – to help students just like you complete their assignments on time and get good grades!

Why do you do it?

Because getting a degree is hard these days! With many students being forced to juggle between demanding careers, family life and a rigorous academic schedule. Having a helping hand from time to time goes a long way in making sure you get to the finish line with your sanity intact!

How does it work?

You have an assignment you need help with. Instead of struggling on this alone, you give us your assignment instructions, we select a team of 2 writers to work on your paper, after it’s done we send it to you via email.

What kind of writer will work on my paper?

Our support team will assign your paper to a team of 2 writers with a background in your degree – For example, if you have a nursing paper we will select a team with a nursing background. The main writer will handle the research and writing part while the second writer will proof the paper for grammar, formatting & referencing mistakes if any.

Our team is comprised of native English speakers working exclusively from the United States.Β 

Will the paper be original?

Yes! It will be just as if you wrote the paper yourself! Completely original, written from your scratch following your specific instructions.

Is it free?

No, it’s a paid service. You pay for someone to work on your assignment for you.

Is it legit? Can I trust you?

Completely legit, backed by an iron-clad money back guarantee. We’ve been doing this since 2007 – helping students like you get through college.

Will you deliver it on time?

Absolutely! We understand you have a really tight deadline and you need this delivered a few hours before your deadline so you can look at it before turning it in.

Can you get me a good grade? It’s my final project and I need a good grade.

Yes! We only pick projects where we are sure we’ll deliver good grades.

What do you need to get started on my paper?

* The full assignment instructions as they appear on your school account.

* If a Grading Rubric is present, make sure to attach it.

* Include any special announcements or emails you might have gotten from your Professor pertaining to this assignment.

* Any templates or additional files required to complete the assignment.

How do I place an order?

You can do so through our custom order page here or you can talk to our live chat team and they’ll guide you on how to do this.

How will I receive my paper?

We will send it to your email. Please make sure to provide us with your best email – we’ll be using this to communicate to you throughout the whole process.

Getting Your Paper Today is as Simple as ABC

No more missed deadlines! No more late points deductions!

}

You give us your assignments instructions via email or through our order page.

ξ€±

Our support team selects a qualified writing team of 2 writers for you.

l

In under 5 minutes after you place your order, research & writing begins.



Complete paper is delivered to your email before your deadline is up.

Want A Good Grade?

Get a professional writer who has worked on a similar assignment to do this paper for you