How did they come up with the Return on Investment and Break-even Point using the formula attached? CalculationDefinitionFormulaPresent Value (PV)The amount of an investment todaycompared to that same amount in the future,taking into account inflation and time.Amount(1 + interest rate)nn = number of years in futureNet Present Value (NPV)The present value of benefit less the presentvalue of costs.PV Benefits – PV CostsTotal benefits – Total costsReturn on Investment (ROI) The amount of revenues or cost savings resultsfrom a given investment.Total costsBreak-Even PointThe point in time at which the costs of theproject equal the value it has delivered.Yearly NPV* - Cumulative NPVYearly NPV**Use the Yearly NPV amount from the first year in whichthe project has a positive cash flow.Add the above amount to the year in which the projecthas a positive cash flow. 20152016201720182019TotalIncreased sales500,000530,000561,800595,508631,238Reduction in customer complaint calls70,00070,00070,00070,00070,000Reduced inventory costs68,00068,00068,00068,00068,000TOTAL BENEFITS:638,000668,000699,800733,508769,238PV OF BENEFITS:619,417629,654640,416651,712663,5523,204,752PV OF ALL BENEFITS:619,4171,249,0721,889,4882,541,2003,204,7522 Servers @ $125,000250,000Printer100,000Software licenses34,825Server software10,945Development labor1,236,525TOTAL DEVELOPMENT COSTS:1,632,295Hardware54,00081,26181,26181,26181,261Software20,00020,00020,00020,00020,000Operational labor111,788116,260120,910125,746130,776TOTAL OPERATIONAL COSTS:185,788217,521222,171227,007232,037TOTAL COSTS:1,818,083217,521222,171227,007232,037PV OF COSTS:1,765,129205,034203,318201,693200,1572,575,331PV OF ALL COSTS:1,765,1291,970,1632,173,4812,375,1742,575,331TOTAL PROJECT BENEFITS COSTS:(1,180,083)450,479477,629506,501537,201YEARLY NPV:(1,145,712)424,620437,098450,019463,395629,421CUMULATIVE NPV:(1,145,712)(721,091)(283,993)166,026629,421RETURN ON INVESTMENT:24.44%(629,421/2,575,331)BREAK-EVEN POINT:3.63 years[break-even occurs in year 4; (450,019 – 166,026)/450,019 = 0.63]This service is currently provided by competitorsImproved customer satisfactionINTANGIBLE BENEFITS:

Needs to understand calculation of Return on Investment and Beak Even Point

CUMULATIVE NPV: (1,145,712) (721,091) (283,993) 166,026 629,4 RETURN ON INVESTMENT: 24.44% (629,421/2,575,331) BREAK-EVEN POINT: 3.63 years [break-even occurs in year 4; (450,019 – 166,026)/450 This service is currently provided by competitors Improved customer satisfaction INTANGIBLE BENEFITS:

CUMULATIVE NPV: (1,145,712) (721,091) (283,993) 166,026 629,4 RETURN ON INVESTMENT: 24.44% (629,421/2,575,331) BREAK-EVEN POINT: 3.63 years [break-even occurs in year 4; (450,019 – 166,026)/450 This service is currently provided by competitors Improved customer satisfaction INTANGIBLE BENEFITS:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Inventory (01/10/18)Raw materials 28800Work in progress 37000Finished goods 33600Sales (114000 @c5) 57000Carriage on raw materials 1470General expenses 25200Selling expenses 51840Plant and machinery 250280Land 50000Bank overdraft 32120Retained earnings 816Ordinary share capital 2000008% preference share 22000Goodwill 40000Bad debts 830Trade receivables 36433Discount allowed 1440Sundry payable 56636Trade investment 8840Advertising 2250Return inwards 9000Discount received 1920Carriage outwards 2280Production wages 126000Office salaries 4860Purchases of raw materials 168000Noodles 15000Factory rent 13600Office insurance 40800Depreciation on plant and machinery 4920InventoryRaw materials 35400Work in progress 39120Loose tools 3000Additional informationDuring the year, 129000 pieces were completed. The closing inventory of finished goods is valued at the cost price per nose mask produced.Goods manufactured during the year are to be transferred to the trading account at GHc 390000.Provide…
May I ask for an explanation and solution to the question for a better understanding. Thank you! 7. Pierce Corporation has the following gross profits for 2018 and 2019: Sales = 2019 - P810,000; 2018 - P792,000. Cost of sales = 2019 - 480,000; 2018 - 464,000. Gross profit = 2019 - P330,000; 2018 - P328,000. Sales price was 10% lower during 2019. The change in gross profit due to change in quantity sold must be: a. P42,710 U b. P44,710 F c. P63,290 U d. P108,000 F
May I ask for an explanation and solution to the question for a better understanding. Thank you! 6. Pierce Corporation has the following gross profits for 2018 and 2019: Sales = 2019 - P810,000; 2018 - P792,000. Cost of sales = 2019 - 480,000; 2018 - 464,000. Gross profit = 2019 - P330,000; 2018 - P328,000. Sales price was 10% lower during 2019. The change in gross profit due to change in cost price must be: a. P39,680 F b. P47,290 F c. P47,290 U d. P63,290 F e. P63,290 U
46. What would the amount of cost of sales be in the following scenario? Purchases returns, R8 000; Freight costs, R4 800; Sales, R320 000; Closing inventory, R25 000; Purchases, R40 000 and Opening inventory, R25 000. A. R32 000 B. R36 800 C. R40 000 D. R283 200
2021 2020 Usage sales 5700 5300 Other miscellaneous revenue for the financial year 300 200 Total revenue for the year 6000 5500 Cost of use sold 2680 2600 Customer and inventory impairment loss 250 220 GROSS REMUNERATION AND EMPLOYER'S CONTRIBUTIONS 800 750 Impairment provisions for the financial year 50 30 Financial costs for the financial year 300 280 Total operating expenses 900 800 Net profit for the financial year 4980 4680 Balance sheet data 1020 820 Fixed assets and investments 2000 1700 Goods 400 250 Customers minus accumulated impairment 696 1100 Customer promissory notes and bills of exchange 300 700 Cash and trading portfolio 200 350 Total assets 3596 4100 How long is the defensive period of the operation in 2021 (360days)
May l ask for an explanation and solution to the question for a better understanding. Thank you! 6. Pierce Corporation has the following gross profits for 2018 and 2019: Sales = 2019- P810,000; 2018 - P792,000. Cost of sales = 2019 480,000; 2018 - 464,000. Gross profit= 2019 P330,000; 2018 - P328,000. Sales price was 10% lower during 2019. The change in gross profit due to change in cost price must be: a. P39,680 F b. P47,290 F c. P47,290 U d. P63,290 F e. P63,290 U
6. Cypress Corp. uses dollar-value LIFO. Certain information follows:YearEnding InventoryCurrent Cost Index2004 $5,000 1002005 5,610 1012006 5,304 1022007 6,042 103Compute the ending 2007 inventory.a. $5,742b. $5,888c. $5,866d. $5,881 Please show work. Do not use excel
Referring to the situation in P9.2 for Garcia Home Improvement Company, consider the following expanded data at May 31, 2020. Assume Garcia uses LIFO inventory costing. Cost ReplacementCost SalesPrice Net RealizableValue NormalProfit Aluminum siding $ 70,000 $ 62,500 $ 64,000 $ 56,000 $ 5,100 Cedar shake siding 86,000 79,400 94,000 84,800 7,400 Louvered glass doors 112,000 124,000 186,400 168,300 18,500 Thermal windows 140,000 126,000 154,800 140,000 15,400 Total $408,000 $391,900 $499,200 $449,100 $46,400 Instructions a. 1. Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2020. 2. For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market. Prior to adjustment, the Allowance account had a balance of $27,500. b. Explain the rationale for the use of the lower-of-cost-or-market rule as it…
May I ask for an explanation and solution to the question for a better understanding. Thank you! 4. Pierce Corporation has the following gross profits for 2018 and 2019: Sales = 2019 - P810,000; 2018 - P792,000. Cost of sales = 2019 - 480,000; 2018 - 464,000. Gross profit = 2019 - P330,000; 2018 - P328,000. Sales price was 10% lower during 2019. The sales volume variance must be: a. P63,000 U b. P90,000 F c. P108,000 F d. P108,000 U
What is the joint cost allocated to product Tab if the company employs relative sales value method? P300,000P200,000P192,000P288,000
37.The Blueberry Company values its inventory by using the FIFO retail method.. The following information is available for the year 2020: Cost RetailBeg. invy 809,000 1,400,000Purchases 2,970,000 4,200,000Freight-in 40,000 Net markups 130,000Net markdowns 30,000Sales 4,000,000Sales discount 75,000At what amount would Blueberry Company report as its estimated cost of goods sold under the FIFO retail method? a. 1,134,000 b. 1,700,000 c. 2,680,000 d. 2,800,000
P8.6 (LO 3) (Compute FIFO, LIFO, Average-Cost—Periodic and Perpetual) Ehlo Company is a multi product firm. Presented below is information concerning one of its products, the Hawkeye.Date Transaction Quantity Price/Cost1/1 Beginning inventory 1,000 $122/4 Purchase 2,000 182/20 Sale 2,500 304/2 Purchase 3,000 2311/4 Sale 2,200 33Instructions Compute ending inventory AND cost of goods sold, assuming Ehlo uses: a. Periodic system, FIFO cost flow. b. Perpetual system, FIFO cost flow. c. Periodic system, LIFO cost flow. d. Perpetual system, LIFO cost flow. e. Periodic system, weighted-average cost flow. f. Perpetual system,…