The Public Service Board (PSB) awarded two contracts worth a combined $3.07 million to increase the depth of a retention basin and reconstruct a spillway that was severely damaged in a flood 2 years ago. The PSB president stated that, surprisingly, the bids were $1,150,000 lower than PSB engineers estimated. If the projects are assumed to have a 20-year life, what is the annual worth of the savings at an interest rate of 5% per year?

Q: A new operations system requires an initial investment of $100,000 and will generate $70,000 in…

A:

Q: The payback period for this proposed investment is:

A: Payback period is the number of years it takes for company to recover the initial investment. It…

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A: Given Information: Details of 7 inch pipe Initial cost - $3,500 Service life - 12 years Salvage…

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A: The conceptual formula used:

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A: EUAC: It is the annual cost of running & operating a project.

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A:

Q: Mary, a project manager for ABC Inc., is reviewing a product quality improvement project. She has…

A: The question is related to the Capital Budgeting. The details are given.

Q: Bowman Corporation is considering an investment in special-purpose equipment to enable the company…

A: Formula used: Payback Period = Equipment costsNet Income including Depreciation Return on Average…

Q: An asset with a first cost of $250,000 is expected to have a maximum useful life of 10 years and a…

A: Economic service life is the time period at which the equivalent uniform annual cost EUAC is…

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A: Net present worth can be calculated as follows:-

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A: Note: $25,000 environmental study cost, which is irrelevant for decision making. So, this cost…

Q: As a financial analyst for Sara Construction, you have been asked to recommend the method of…

A: Hi, since the question has multiple sub-parts, I will answer the first three as per the guidelines.…

Q: The city of Oceanside has a new water treatment plant. The plant was purchased for $864,360. It has…

A: benefit-cost ratio: A benefit-cost ratio (BCR) is a financial or monitory measure that shows the…

Q: Your company has just signed a three-year nonrenewable contract with the city of New Orleans for…

A: Cost of equipment = $203,000 Contract period = 3 years  Selling cost = $65,000 Operating expense =…

Q: A municipality is planning on constructing a water treatment plant at an initial cost of…

A: Capital cost is the cost which is required to purchase an equipment. It also includes the repair…

Q: Six years ago, Neighborhood Hardware paid a contractor $63,000 to expand the store. At that time,…

A: Net present value is the difference between the present value of cash inflows and present value of…

Q: A utility company is considering the following plans to provide a certain service required by resent…

A: The question is based on the concept of long term investment decision by use of capital budgeting…

Q: A Construction Company has just purchased a fleet of five truck to be used for delivery in a…

A: The present value is the present worth of the amount that will be paid or received at future.

Q: A town in Wyoming wants to drill a geothermal well to provide district heating steam and hot water…

A: Internal Rate of Return: The rate that makes the NPV equal to zero, is called the Internal rate of…

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A: Net present value is used to calculate the existing value of future cash flows for decision making.

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Q: After seeing its neighboring village obtain a new water tower, the city board of East Dubuque begins…

A: Time Period = 20 Years Interest rate = 9% compounded daily Future Value = $1,750,000

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A: Salvage value is the value at which machine or an asset can be sold after the expiry of its life. By…

Q: A bulk-water supplier has been awarded by a city to supply their potable water for the next 10…

A:

Q: A state government is considering construction of a flood control dike having a life span of 15…

A:

Q: SAP Inc. received a $1.5 million grant under its Small Business Innovation program. SAP invested the…

A: Data given: Investment = $1.5 million = $15,00,000 Revenue    = $400,000 x 4 = $16,00,000 Cost of…

Q: A large mudslide caused by heavy rains will cost Sabino County $1,000,000 per occurrence in lost…

A: Discounting is a technique through which present value of future amount is calculated by using…

Q: Anchor Ltd paid $15,000 last quarter for a feasibility study regarding the demand for motor-boat…

A: Initial cash flow: Please note that we have added opportunity cost as company is foregoing cash…

Q: The Rosco company is purchasing a new machine that will increase revenue for 8 years. The purchase…

A: NPV(Net Present Value) = Present Value of Cash Inflow - Present Value of Cash Outlows

Q: The Rosco company is purchasing a new machine that will increase revenue for 8 years. The purchase…

A: Solution- Given that Purchase price=$2,45,900 Working capital=$55,000 Service in 3rd and 6th year…

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A: The question is based on the concept of Project Valuation.

Q: Green County is planning to construct a bridge across the south branch of Carey Creek to facilitate…

A: EUAC: It is a measure of equivalent annual cost in which total upfront cost is converted into the…

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A: IRR (Internal Rate of Return) is the rate at which NPV is expected to be zero. This means it…

Q: In conducting an EVA analysis for year 2 for a newly introduced product line, Bethune, Inc., which…

A: EVA is the firms economic profit after deducting the companies cost of capital.The expenses…

Q: Iron Company is considering a new equipment which will cost $75,000 today.  The equipment would be…

A: The question is based on the concept the Net Present Value (NPV) and Modified Internal rate of…

Q: On July 1, Coastal Distribution Company is considering leasing a building and buying the necessary…

A: In differential analysis, the differential revenue that could be gained or differential cost that…

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A: We need to use the concept of time value of money to solve the question. According to the concept of…

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A: Annual cash flows = Net Income + Depreciation = 79,500+ 26,500= $106,000 As annual cash flows are…

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A: NPV means PV of net benefits arises from the project in the future. It can be simple calculated by…

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A: Honor Code: Hi there, thanks for posting the questions. But as per our Q&A guidelines, we must…

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A: The question is based on the concept of calculation of cash flows from a new project with…

Q: Compute the NPV and IRR

A: Both NPV and IRR are discounting cash flow (DCF) techniques. NPV is the Net Present Value of an…

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A: NPV computes the existing value of future benefits by discounting future worth with a stated…

Q: n 2016, the city of Abu Dhabi collected $24 million in fines from motorists because of traffic…

A: The rate of return is a ratio between net operating income and the initial cost of any project. It…

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A:

Q: Officials from the City of Galveston and State of Texas gathered to celebrate the start of a beach…

A: Excel Spreadsheet: Excel Workings:

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A: Rate of return is determined by dividing the net profit after tax by the total amount invested.  The…

Q: Quillen Company is performing a post-audit of a project completed one year ago. The initial…

A: Given,  Original Net annual cash flows = $44,200 Original Investment cost = $250,000 Revised Net…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.