Given the following information, determine the value of having an additional bathroom. Assume that the comparable properties are similar in all other attributes besides those listed in the table below. Time sold Bathrooms Bedrooms Size Sale price Comparable 1 Comparable 2 Comparable 3 Comparable 4 Today 1 year ago Today 1 year ago 1 1 2 2 2 1 2 2 O $317 O$ 607 O$ 914 O$624 2700 sq. ft $2541 4750 sq. ft. $2848 2700 sq. ft $3165 2700 sq. ft. $3455
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A 13.
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- A distribution company is considering three different alternatives to satisfy their customer's demands. Their options are to rent a ready distribution center (D01), Rent and mobilize a center (D02), or outsourcing (OS). The estimate for each method is shown. The lifetime for D01, D02, and OS are 3, 6, and 2 respectively. MARR is 0.04 per year. and the percentage of change for all of the cases are 0 % Note: all units are in thousand $ D01 D02 OS First Cost, $ -136 -973 0 Annual Operation Cost,$ -92 -59 -123 Salvage Value,$ 28 333 0 a: Calculate the Fw of D01? b) Calculate FW for D02 c )What is the FW for outsourcing? d: Which alternative will be selected? f: Draw the cash flow for all of these three alternatives. If contract value with subcontractor increases by 15 % every year calculate FW for Outsourcing. Is there any change in your previous decision on the basis of the new condition? If yes, which…The Athlete’s Shop owner evaluated two proposals for exercise equipment. A present worth analysis at i = 15% resulted in PWA = $340,000 and PWB = $290,000. Independently, the lead trainer assigned a relative importance score from 0 to 100 to three noneconomic attributes, plus the economic attribute. Attribute Trainer’s ScoreEconomics 80Durability 35Flexibility 30Maintainability 50 Separately, you have used the four attributes to value rate the proposals on a scale of 0 to 1.0 as shown in the following table. Value Ratings Attribute Proposal A Proposal BEconomics 1.00 0.90Durability 0.35 1.00Flexibility 1.00…a) Using incremental analysis, determine if the component should be purchased from the outside supplier? Would your decision in part a) change if the company has the opportunity to rent out its facilities that it currently uses to manufacture the component for $5,500 ? Show full computations Why “Opportunity Costs” are not recorded in the financial books but are considered a relevant cost.
- CASE STUDY ANNUAL WORTH ANALYSIS—THEN AND NOW Background and Information Mohamad, owner of an residential furnished apartment's in Dubai, performed an economic analysis 4 years ago when he decided to place an new eefficient central AC unit for each apartments instead of old split units windows type in each room. The estimates used and the annual worth analysis at MARR = 12% are summarized below. Two different AC brands were compared. LG York Cost and installation, $ −26,000 −36,000 Annual maintenance cost, $ per year −800 −300 Salvage value, $ 2,000 3,000 Electrical power savings, $ per year 25,000 35,000 Useful life, years 7 10 The spreadsheet in below sheet is the one Mohamad used to make the decision. York was the clear choice due to its substantially larger AW value, hence York AC units were installed. MARR 12% LG York Investment Annual Repair Investment Annual…Please find the Asset Beta (IndustryBeta) based on the following information below: Currently, Ljutic A/I Inc. has hired a consulting firm (Oakland Association-OA) to estimate the size of the market and hence expected unit sales for its main product (E-toral application sensor). OA’s work resulted in unit sales estimates of 318,331, 341,342, 368,769, 383,432, and 376,532 units respectively for the next five years conditioned on Ljutic adhering to an average sales price of $568 per unit for the first two years and $387 in years three, four, and five. From that point going forward, growth in unit sales is predicted to be 2.72% indefinitely. The results of an independent outside analysis by a leading market research firm has determined that the company can manufacture its product line at a variable cost per unit expected to be $63.47 growing at 2.23% per year for the first 5 years and 3.17% per year indefinitely thereafter while overall fixed costs are estimated to be $10,482,000…Consider the following cost and pricing data of ABC Corp. on its Product X:Price: P120.00.per unitProfit Contribution: P90.00Proposed additional Cost: P3 per unit (for quality improvement)Current Profits: P2.4 millionSales: 100,000 units. A. Assuming that average variable costs are constant at all output levels, findABC Corp.’s total cost function before the proposed change.B. Calculate the total cost function if the quality improvement is implemented. UNANSWERED SUB-PARTSC. Calculate ABC Corp.’s break-even output before and after the change, assuming it cannot increase its price.D. Calculate the increase in sales that would be necessary with the quality improvement to increase profits to P2.7 million
- Low, medium, and high cost ranges for a 30,000 ft2 apartment building in ZIP code 79912 were estimated to be $3,111,750, $3,457,500, and $4,321,875, respectively. (a) What is the cost per square foot for the medium cost estimate? (b) What is the percent increase between low and high cost estimates per ft2?Ouzts Corporation is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below: Alternative A Alternative B Materials costs $ 49,000 $ 64,700 Processing costs $ 44,900 $ 44,900 Equipment rental $ 15,500 $ 15,500 Occupancy costs $ 17,400 $ 26,100 What is the financial advantage (disadvantage) of Alternative B over Alternative A? Garrison_16e_Rechecks_2019_10_10 Multiple Choice $126,800 $(24,400) $151,200 $(139,000)In the process of finding the optimum order quantity the following costs are obtained per order or per unit annually. Inspection Cost = SR 4 Cost of Interest = SR 4 Insurance Cost = SR 2 Administration Cost = SR 4 Obsolescence = SR 3 Depreciation Cost = SR 2 Breakage Cost = SR 2 Given that the annual Demand is 500,000. Number of order?
- Calculate the profitability of the following proposal using Return on investment method Proposal I Automatic machine Cost 420000 Estimated life 6.5 years Estimated sales p.a 175000 Cost : Material 60000 Labor 22000 Variable overheads 14000 a. 16.53% b. All the options are wrong c. 3.42% d. 4.62%It is desired to determine how much longer a forklift truck should remain in service before it is replaced by the new truck (challenger) for which data were given in the shown Table. The defender in this case is two years old, originally cost $19,500, and has a present realizable MV of $7,500. If kept, its MVs and annual expenses are expected to be as follows: Determine the most economical period to keep the defender before replacing it (if at all) with the present challenger of Example. The before -tax cost of capital (MARR) is 10% per year. A new forklift truck will require an investment of $30,000 and is expected to have year-end MVs and annual expenses as shown in columns 2 and 5, respectively, of Table. If the before-tax MARR is 10% per year,Oak Island Amusements Center provides the following data on the costs of maintenance and the number of visitors for the last three years. Number of Visitors per Year(thousands) Maintenance Costs($000) 1,830 $ 2,316 2,010 2,559 2,700 3,360 Required: a. Use the high-low method to estimate the fixed cost of maintenance annually and the variable cost of maintenance per visitor. (Enter your answers in dollars not in thousands of dollars. Round "Variable cost" answer to 2 decimal places.) b. The company expects a record 2,000,000 visitors next year. What would be the estimated maintenance costs? (Enter your answer in dollars not in thousands of dollars.)