Question Details

Write A Memo To The General Manager Explaining Your Analysis For The Specialty Spark Plug Project 
Include the following information: 
Present the NPV and IRR calculated for the purchase of new equipment (Phase 3 task 1). 
Explain the effect of a sales volume increase on the total fixed costs, unit fixed costs, total variable cost, and unit variable cost. 
Discuss the effect of a volume increase in sales, a price increase in sales, and a cost decrease on the net operating income. 
Calculate the payback period for the new equipment project. 
Make a recommendation about the manufacture of the specialty spark plug and purchase of new equipment.
•         Capital Budgeting Calculations
•         Write a memo to the general manager explaining your analysis for the specialty spark plug project. 
Include the following information: 
•          
•         I.                    Heading : Introduction
•         II.                  Heading :  Presentation of NPV and IRR Results - Present the NPV and IRR calculated for the purchase of new equipment (Phase 3 task 1). 
•         III.                Heading :Affect of Sales Volume Increase On Costs- Explain the effect of a sales volume increase on the total fixed costs, unit fixed costs, total variable cost, and unit variable cost. 
•         IV.                Heading :Affect of Sales Volume Changes on Net Operating Income - Discuss the effect of a volume increase in sales, a price increase in sales, and a cost decrease on the net operating income. 
•         V.                  Heading : Payback Method Calculation - Calculate the payback period for the new equipment project. 
•         VI.                Heading : Recommendations - Make a recommendation  about the project
•         VII.              Conclusion
•         VIII.            References
1500-1750 words, excluding references


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