The case, Anwar Aluminum Works, is based on an actual situation that occurred. The case has been specifically chosen due to its links to entrepreneurial issues and problem solving in the areas such as relevant costs, sensitivity analysis, breakeven, return on investment and payback.
1. Calculate the projected contribution margin rates for each product order
2. Identify all the potential cash flows associated with each of the two product orders and break them down indicating whether each one is fixed or variable and whether it is a recurring cost or a one-time cost.
3. Perform a quantitative assessment:
a. Prepare an incremental analysis for each of the two customer orders, including the incremental cash inflows and outflows from operations for each order.
b. determine the return on investment and the payback period in years for each scenario based on your calculations.
Attachment:- situation.rar