A company Is considering a new project that will cost $19,000. This project would result In additional annual revenues of $6,000 of a(n): Multiple Cholce Incremental cost. Sunk cost. Opportunity cost. Uncontrollable cost. Fixed cost.
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- If the imputed charge is 15% and Tan wants to achieve a residential income target of P2,000,000, what should be the amount of costs to achieve the target residual income? Elise Wong is the general manager of the Industrial Product Davision, and his performance is measured using the residual income method. Tan is reviewing the following forecasted information for next yr Category Amount Working Capital 1,800,000 Revenue 30,000,000 Plant and Equipment 17,200,000Wallen Corporation is considering eliminating a department that has an annual contribution magin of $80,000 and $160,000 in annual fixed costs. Of the fixed costs, $90,000 cannot be avoided. This annual financial advantage/ disadvantage for the copany of eliminating this department is ? A. 10,000 or B. -10,000 or C. 80,000 or D. -80,000Wexford Industrial Supply is considering a new project with estimated depreciation of $38,200, fixed costs of $84,600, and total sales of $211,000 at the accounting break-even level. The variable costs per unit are estimated at $9.64. What is the accounting break-even level of production?
- Chadron Motors is reviewing a project with sales of 6,200 units, ±2 percent, at a sales price of $29, ±1 percent, per unit. The expected variable cost per unit is $11, ±3 percent, and the expected fixed costs are $85,578, ±1 percent. The depreciation expense is $68,000 and the tax rate is 21 percent. What is the net income under the worst-case scenario? A. $4,696 B. –$28,704 C. $15,846 D. −$39,713 E. −$38,578You are asked to evaluate ergonomic interventions for your company based on the following projections: Decreased annual Workers' Compensation costs: $13, 060 Increased annual production: $17,501 Initial purchase costs: $4, 561 If you have an expectation of 3.75% interest over a 6-year period, what would you calculate the multiplier for the Worker's Comp equivalence calculation to be if you're asked to evaluate the future worth over the life of the project?Hyms Division of ASOP’s Company’s operating results include: controllable margin, P200,000; sales P2,200,000; and operating assets, P800,000. The Hyms Division’s ROI is 25%. Management is considering a project with sales of P100,000, variable expenses of P60,000, fixed costs of P40,000; and an asset investment of P150,000. Should management accept this new project? a. No, since ROI will be lowered. b. Yes, since ROI will increase. c. Yes, since additional sales always mean more customers. d. No, since a loss will be incurred.
- A project under consideration costs $750,000, has a five-year life and has no salvage value. Depreciation is Straight-Line to zero. The Required Return is 17 percent, and the Tax Rate is 34 percent. Sales are projected at 500 units per year. Price per unit is $2,500, Variable Cost per unit is $1,500, and Fixed Costs are $200,000 per year. It is estimated the unit sales, sales price, variable cost, and fixed cost projections given here are accurate to within 5 percent. What are the Base, Upper and Lower bounds for: Sales Variable costs EBITDA?Company XYZ has appraised a project with an expected life of six years using NPV and has calculated the project has a negative NPV of $8,500. Few of the costs are controllable however the production director thinks that labour costs could be reduced. Labour currently costs $25,000 annually and XYZ’s cost of capital is 15%. Calculate to four decimal places what percentage the labour costs must be reduced in order to make the project earn the 15% cost of capital.Cardinal Company is considering a project that would require a $2,782,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $200,000. The company’s discount rate is 18%. The project would provide net operating income each year as follows: Sales $ 2,873,000 Variable expenses 1,019,000 Contribution margin 1,854,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 754,000 Depreciation 516,400 Total fixed expenses 1,270,400 Net operating income $ 583,600 Required:If the equipment’s salvage value was $400,000 instead of $200,000, what would be the project’s simple rate of return? (Round your answer to 2 decimal places.)
- Consider an order delivery business that will be a 5-year project. The required net working capital is $6.6 million and it will be returned at the end of the life of the project. Required equipment (net capital spending) will cost $15 and it will be depreciated straight-line to 0 over the 5-year life of the project. The business will have sales of $3 million in year 1, $6 million in year 2, and $10 million in years 3, 4, and 5. Costs are 30% of sales and the tax rate is 20%. (If there is a loss at the EBIT line, assign taxes of 0 for that year and do not carry tax losses forward.) The equipment has no salvage value. Create an income statement for years 1, 2, and 3, 4, and 5 (3, 4, and 5 will have the same income statement). Use the information from the income statement to calculate the operating cash flow using EBIT + depreciation – taxes for each year. Put all cash flows (net working capital, net capital spending, and operating cash flows) on a timeline. Using total cash flows from…A proposed project has fixed costs of $7,400, depreciation expense of $1,320, and a sales quantity of 1,600 units. The total variable costs are $5,607. What is the contribution margin per unit if the projected level of sales is the accounting break-even point? Question 10 options: $6.28 $4.63 $5.45 $5.16 $8.13The total research and development costs of P200,000 incurred to develop the new product is a/an choices postponable cost relevant cost sunk cost avoidable cost