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Wheelworks inc. produces bike parts and uses them to assemble bikes. It sells them to a distributor who sells them to retailers. Assume a weighted- average cost of capital of 12 percent is appropriate for wheelworks. Here are the costs and revenues of each stage of the value chain. All data are for the production of enough bikes to produce 10.000 bikes.

Bike Part Production: The estimated market value at beginning of year $1,025,000 and at the end of the year is $975.000. Revenues, if the parts were sold in the market would be $300.000. Operating costs, including all the materials needed to make the parts total $100.000 excluding depreciation

Bike assembly: Estimated market value of assets at beginning of year   is $ 600,000 and $400,000 at the end of the year. Revenues, if the bike were sold in the market would be $1, 500,000. Operating costs, including the cost of parts total $1,250.000 excluding depreciation.

Distributor: Sells the bikes for $175 per bike. The cost of the bike to the distributor can be found by reviewing the sales from the bike assembly. Operating costs total $5 per bike, including economic depreciation. The cost of capital for the distributor is $12 per bike

Retailer: Sells the bikes for $250 per bike. The cost to the retailer can be found by reviewing the sales from the distributor. Operating costs total $33 per bike, including economic depreciation. Cost of capital for the retailer is $4 per bike

Compute the profits of each stage of the value chain. Show amounts in total for 10,000 bikes and per bike.

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