PROBLEM #3: A firm is charged by Php 150.00 per ton for hauling its raw materials by a trucking company. Forty tons per day are hauled for 300 days a year. It is a desired to install a railway ystem which would bring down the cost of hauling to Php 6.60 per ton. Maintenance cost is Php 2,000.00 per month. Tax is 1%. Average rate of earning is 20%. A.) If the company has the cash necessary for the installation, would you recommend change? B.) If the company has to float Php 5,000.00 worth of non-callable bonds at 15% that will mature in 10 years to have the capital for the project, would you recommend the change?
PROBLEM #3: A firm is charged by Php 150.00 per ton for hauling its raw materials by a trucking company. Forty tons per day are hauled for 300 days a year. It is a desired to install a railway ystem which would bring down the cost of hauling to Php 6.60 per ton. Maintenance cost is Php 2,000.00 per month. Tax is 1%. Average rate of earning is 20%. A.) If the company has the cash necessary for the installation, would you recommend change? B.) If the company has to float Php 5,000.00 worth of non-callable bonds at 15% that will mature in 10 years to have the capital for the project, would you recommend the change?
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 13P: Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income...
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