Fill in order details

  • Submit your instructions
    to writers for free!

Chat with the writer

  • Chat with preferred expert writers
  • Request a preview of your paper
    from them for free


  • Project edited by the quality evaluation department

Download Your Completed Project

  • Download the completed project from your account or have it sent to your email address

It’s now 2017, and El Cap Climbing Company (ECCC) has continued to grow. One of ECCC’s major revenue-producing products is a spring-loaded camming device called SLCD, or cams. It’s a device with a small handle (called the “trigger”) and two spring loaded “cams” on an axle.

It’s now 2017, and El Cap Climbing Company (ECCC) has continued to grow. One of ECCC’s major revenue-producing products is a spring-loaded camming device called SLCD, or cams. It’s a device with a small handle (called the “trigger”) and two spring
loaded “cams” on an axle. When the trigger is pulled, the cams move together, decreasing the size of the cams. It’s then inserted into a crack or pocket in the rock. When the trigger is released, the cams expand. These cams are used as anchors when “trad” rock climbing.

ECCC currently has one set of cams on the market, and sales have been excellent. The cams are lighter and perform better than their competitors. However, as with any high-performance item, technology changes rapidly, and the cams are now falling behind the competition.

ECCC spent $200,000 to develop a prototype for a new line of cams that has all the features of the existing cams, but are made from an even lighter and stronger 7075-T6 aluminum alloy. The company has spent a further $150,000 for a marketing study to determine the expected sales figures for the cam line.

ECCC can manufacture a set of the new cams for an average of $140 each in variable costs. Fixed costs for the operation are estimated to run an additional $2.1 million per year if the new project is undertaken. The estimated sales volume is 75,000, 85,000, 80,000, 70,000, and 65,000 per year for the next five years, respectively. The unit price of the new cam set will be $240. The necessary equipment can be purchased for $10.5 million and will be depreciated on a seven-year MACRS schedule. It’s believed the value of the equipment in five years will be $1.1 million.

Production of the current cam line is expected to be terminated in two years. If ECCC doesn’t introduce the new line of cams, sales will be 45,000 units and 25,000 units for the next two years, respectively. The price of the cam set is $150, with variable costs of $95 each, and fixed costs of $1.5 million per year. If ECCC does introduce the new cams, sales of the existing product will fall by 10,000 units per year, and the price of the existing sets should be lowered to $120 each. Net working capital for the cams will be 22 percent of sales and will occur with the timing of the cash flows for the year; for example, there’s no initial outlay for NWC, but changes in NWC will occur in Year 1 with the first year’s sales.

ECCC has a 30-percent corporate tax rate and a required return of 10 percent. (Note: You can create the solutions in the same Excel spreadsheet that has the data report information. Be sure to let the instructor know if you choose to do this instead of creating them in a Word document.)

Leah has provided you with a data report in an Excel spreadsheet that contains information to answer the following questions:

1. What’s the payback period of the project?
2. What’s the profitability index of the project?
3. What’s the IRR of the project?
4. What’s the NPV of the project?
5. Should Leah accept the project?
6. If Leah needs to adjust the price of the product, what’s the lowest Leah could make the price of the new cam set and still have a positive NPV project (keeping all other assumptions the same)?

Place your order now on a similar paper and get best quality work written by our expert level writers. “A” guaranteed.assignment writing help

What our customers say

Ishita M.Ishita M.
Great Job! Thank you so much for your work. You got it done faster than I imagined and everything is perfect. Will definitely be using you again!
Megan J.Megan J.
"As a wife, mother, and full-time student, I was struggling to try to go back to school and take care of my responsibilities. Sometimes you just need a little help, and I appreciate all the help I have gotten from Academic Research Bureau. My papers are on-time and the writers are easy to work with. Thanks for the support!"
Rajab M.Rajab M. has saved me a lot of time. I was tired of taking the same classes many times over again. As an ESL student, my professors were taking points off of my assignments for my grammar mistakes. It made it very hard to feel encouraged to continue with my studies. Thankful for having found an answer for better grades."
Frank N.Frank N.
As a working student, I just really don't have the time to write paper after paper and complete assignment after assignment. Working full-time and going to school was nearly impossible until I was able to feel comfortable with the writers on this site. They make me feel secure enough to trust them with my papers. While I'm busy with life, they are busy writing my papers. They always do an outstanding job!
Courtney B.Courtney B.
Thank you! You were really patient with me and my needs. This was my first time using you guys, however, I will definitely be using you again!
John H.John H.
I cannot tell you enough how amazing your company is! Your writers are superb, on time, excellent content, so very thankful you reached out to me that day! Lifesaver for sure! Couldn’t be happier with the results I’ve gotten from my first 2 papers with you, I have 4 papers left to go and I’ll be using your company for them all!
Rebecca T.Rebecca T.
After I ordered a dissertation from your writing service, the first paper that I was given did not met my professor’s demand. I set the paper on revision and the writer made the revision for free meeting all my requirements and I was very satisfied
Thomas R.Thomas R.
I was shocked by how your writers managed to deliver my paper on time, and I was among the best in our class in that paper. Thank you so much and I will never hesitate to use you
error: protected!!