Recent research has made possible the development of a sensing device. The company that own the Research (HALA) has just work on a process for mass-producing the device. The visibility study provides the following information:

The estimate of annual sales would be 1,500 units if the device were priced at $85,000 per unit (in dollars of the first operating year).
HALA would need a new manufacturing plant. This plant could be built and made ready for production within 2 year.
HALA would need a 30-acre tract of land that would cost $2 million; the land could be purchased on December 31, 2021.
The new manufacturing plant building would cost $6 million and would be depreciated according to the Straight-Line (SL) Method.
A first payment of $2 million (out of the manufacturing plant building cost $6 million) would be due to the contractor on December 31, 2021, and the remaining $4 million on December 31, 2022.
The required manufacturing equipment would be installed and would be paid for on December 31, 2022. The equipment cost is $145 million, plus a further $5 million for installation. The equipment would be depreciated according to the Double Declining Balance (DDB) Method.
The project would require an initial investment of $15 million in working capital. This investment would be made on December 31, 2022.
The project’s estimated economic life is 7 years (starting after the 2-year construction period).
At the end of the project lifetime, the land is expected to have a market value of $2.5 million, the building a value of $500,000 million, and the equipment a value of $5 million.
The estimated total variable manufacturing costs would $14 million yearly.
Fixed costs would be $20 million for each year of operations.
Since the plant would begin operations on January 1, 2023, the first in flow cash would occur on December 31, 2024.
HALA has $5.4 million budget for research and development (R&D). The company has already expensed all of it to date on R&D.
HALA’s market interest rate (MARR) is 25%. Any capital gains will also be taxed at 40%.

Your report must provide answers for the following:

Part one:

Construct the Income Statement, and Cash Flow Statement for the project
Determine the Net Cash Flows, PW, and IRR of the project.
Comment on “Gains tax” and “Sunk cost” amounts if there is any.

Sample Solution

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Implementing subroutines using MIPS. In this lab we shall use the jal and jr commands
to implement subroutine calls.Write a program that reads in 4
numbers and prints out the maximum and minimum of the input numbers. A sample run of the
program will look like the following:
input a number: 13
input a number: 11
input a number: 19
input a number: 8
The maximum of the four numbers is 19
The minimum of the four numbers is 8
The requirements are as follows:

1. Write a subroutine readtwo that prompts for and reads two integers and returns them to the
   calling program.
2. Write a subroutine findminmax that takes 4 integers as input parameters and returns the
   minimum and the maximum of these to the calling program.
3. Write a main program that calls readtwo twice to get the input and then calls findminmax
   to complete the computation and prints the result.
4. Use all the appropriate MIPS conventions for the use of registers.
5. Have your program checked for correctness during the lab and turn in a printout.
   Sample Code that uses a subroutine call:

v0 – reads in an integer

t0 – holds the sum

a0 – points to strings to be printed

– also used to pass N to “sumup”

Sample Solution

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