Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows the can to be sealed after opening to prevent gas escaping. In January 2019 the idea for this new product was launched, and a loan of £5 million was obtained from Sunshine Bank in order to finance this project.
Q: Melan Co. is considering a new gin distillery investment in Surrey for five years. The company has…
A: Net Present Value(NPV) is computed by deducting initial outlay of proposal from PV of subsequent…
Q: Philadelphia Fastener Corporation manufactures nails, screws, bolts, and other fasteners. Management…
A: Standard Disclaimers“Since you have asked multiple question, we will solve the first question for…
Q: AMT, Inc., is considering the purchase of a digital camera for the maintenance of design…
A: Internal rate of return: It is the tools utilised in capital budgeting to estimate the…
Q: AMT, Inc., is considering the purchase of a digital camera for the maintenance of design…
A: Annual worth is calculated over one life cycle of the asset and is usually used to compare the…
Q: Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows…
A: IAS 38: It is an accounting standard that provides guidelines relating to recognition, measurement,…
Q: whether this is a desirable investment by using the present worth method.
A: Present worth method means the difference between PV of cash inflow & Cash outflow. Decision…
Q: AMT, Inc., is considering the purchase of a digital camera for the maintenance of design…
A: IRR method is one of the project selection methods in capital budgeting. IRR is compared with the…
Q: he capital investment requirement is P345,000 and the estimated market value of the system after a…
A: Net Cashflow for each of 6 years = Annual revenues - Annual expenses Net Cashflow for each of 6…
Q: A tool and die company in Sydney is considering the purchase of a drill presswith fuzzy-logic…
A: Incremental cash flow is the difference between cash-flow incurring due to different alternatives.…
Q: Heels, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would custom…
A: Payback period implies the period within which the initial investment will be returned or paid back…
Q: AMT, Inc., is considering the purchase of a digital camera for the maintenance of design…
A: The return of initial investment during the life of the investment is known as capital recovery. An…
Q: Your manager has asked you to advise your client Kofi Gyato, owner and director of Kofi Gyato…
A: Depreciation means the amount of expenses due to usage of fixed assets due to normal wear and tear…
Q: Dublin Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2018,…
A:
Q: A firm is considering the installation of an automatic data processing unit to handlesome of its…
A: Given in the question: Interest rate which is worth of the money = 15% Purchase price of the machine…
Q: Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows…
A: According to IAS 38 of intangible assets, the amount incurred on research should not be capitalized…
Q: AMT, Inc., is considering the purchase of a digital camera for maintenance of design specifications…
A: EVA stands for economic value added. It is the total value addition which an investor gets from the…
Q: Dublin Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2018,…
A: There are both financial and non-financial factors that should be considered at the time of electing…
Q: GST
A: Definition: Goods and Services tax (GST): GST is an indirect tax which is levied on goods and…
Q: Heels, a shoe manufacturer, Is evaluating the costs and benefits of new equipment that would custom…
A: The payback period is the time period in which the company recovers its initial investment without…
Q: Iqra University is considering investing in an online book ordering and information service, which…
A: Return on capital computes how much amount business generates by using funds of capital providers.
Q: AMT, Inc., is considering the purchase of a digital camera for the maintenance of design…
A: External rate of return is the rate of return on a project where all the extra returns on the…
Q: where computer-aided design files can be superimposed over the digital pictures. Differences between…
A: The payback period method is used to appraise various capital investment projects. It uses the cash…
Q: Sheridan Inc. owns and operates a number of hardware stores in the Atlantic region. Recently, the…
A: leasing vs Buying options: Leasing has the potential to be more enticing than purchasing. Because…
Q: discounted payback method.
A: The payback period method is used to appraise various capital investment projects. It uses the cash…
Q: AROMAX Ltd is considering a new line of office chairs and has employed a marketing consultant for…
A:
Q: exas University is considering investing in an online book ordering and information service, which…
A: Project investment is analysis by method of capital budgeting. Capital budgeting techniques are used…
Q: Flyingbird Learning Ltd. is a company located in Virginia. The company develops online training…
A: In the comparative analysis of differentiating between old and new options usually relevant costing…
Q: Wilderness Products, Inc., has designed a self-inflating sleeping pad for use by backpackers and…
A: Return on investment is the measure of efficiency of the investment. It determines the amount of…
Q: A software package created by Navarro & Associates can be used for analyzing and designing…
A: Present worth method is the method, under this the cash flow of every alternative would be decreased…
Q: Shilling Corp. is thinking about opening a baseball camp in Florida. In order to start the camp, the…
A:
Q: Melan Co. is considering a new gin distillery investment in Surrey for five years. The company has…
A: Net Present Value(NPV) is excess of PV of inflows over PV of outflows related to proposal that are…
Q: Mr. Kaer, a finance executive with Zico Bhd. was instructed by CEO to revise the draft the tender…
A: Calculation of Initial investment of the project using excel is as follows:
Q: Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows…
A: An intangible asset is recognized only when it satisfies the following conditions: An intangible…
Q: A Firm Considering The Installation Of An Automatic Data Processing Unit To Handle Some Of Its…
A: A lease agreement laying out the terms under which one gathering consents to lease property…
Q: A micro-berry is considering the installation of a newly design boiler system that burns and dried,…
A: Given:
Q: Heels, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would custom…
A: Break-even time: It can be defined as the total time that is usually required for the discounted…
Q: Dublin Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2018,…
A: Payback period: Payback period is the expected time period which is required to recover the cost…
Q: Drillmaster Sdn Bhd has developed a powerful new hand drill that would be used for woodwork and…
A: Note: The question provides different discount rates for different coefficients of variation. The…
Q: A chemical engineer believes that by modifying the structure of a certain water treatment polymer,…
A: Given:Extra income by modification of plant is $6000 per year.Interest rate per year 10%Time period…
Q: Rafieza restaurant is considering the installation of a new processing machine that will cost…
A: GIVEN ÷ New processing machine = RM54,000 installation cost of cooker = RM1,200 Networking capital…
Q: AMT, Inc., is considering the purchase of a digital camera for maintenance of design specifications…
A: NPV computes the existing value of future benefits by discounting future worth with a stated…
Q: nthony’s College is considering the replacement analysis of a concrete mixer. The old mixer has…
A: The capital budgeting process that determines whether current assets need to be replaced or not is…
Q: A consulting engineer is considering two methods for lining landfill for municipal solid waste…
A: Breakeven is point where cost of two methods will be equal. Various factors are consider like time…
Q: AMT, Inc., is considering the purchase of a digital camera for the maintenance of design…
A: IRR is the rate of return a project generates through its lifetime expressed in annual terms. It is…
Q: Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows…
A: As per IAS 38: Intangible assets. Research: Research expense is the planned investigation undertaken…
Q: A software package created by Navarro & Associates can be used for analyzing and designing…
A: Present worth is the current value of a future sum of money or stream of cashflows given a…
Q: In February 2021, Culverson Company began developing a new software package to be sold to customers.…
A:
Step by step
Solved in 2 steps
- Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows the can to be sealed after opening to prevent gas escaping. In January 2019 the idea for this new product was launched, and a loan of £5 million was obtained from Sunshine Bank in order to finance this project. The associated costs and activities for the year ended 31 May 2020 are as shown below: 01 June 2019 – 31 July 2019: £30,000 per month on market surveys to establish whether or not consumers would want such can. The market surveys suggest that there is a market for the can amongst environmentally aware consumers. 01 August 2019 – 30 September 2019: £100,000 for evaluation of a number of alternative prototypes and designs. End of September 2019: a design is chosen and engineers produce a plan which indicates that is technically possible to produce the Soak can. 01 October 2019 -31 January 2020: £1,300,000 was spent for the design and construction of a pilot manufacturing plant.…Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows the can to be sealed after opening to prevent gas escaping. In January 2019 the idea for this new product was launched, and a loan of £5 million was obtained from Sunshine Bank in order to finance this project. The associated costs and activities for the year ended 31 May 2020 are as shown below: 01 June 2019 – 31 July 2019: £30,000 per month on market surveys to establish whether or not consumers would want such can. The market surveys suggest that there is a market for the can amongst environmentally aware consumers. 01 August 2019 – 30 September 2019: £100,000 for evaluation of a number of alternative prototypes and designs. End of September 2019: a design is chosen and engineers produce a plan which indicates that is technically possible to produce the Soak can. 01 October 2019 -31 January 2020: £1,300,000 was spent for the design and construction of a pilot manufacturing…
- Kako Ltd is considering introducing a new product unto the market. This will require the injection of capital to the tune of GH¢20,000 for the purchase of the equipment for production. The cost of the building that Kako Ltd intends to use for the project is GH¢30,000. The Production and Marketing department has presented the information in the table below: 2019 Variable cost per unit of the product GH¢2 Selling price per unit GH¢6 Quantity 4000 units per annum Again the following information should be taken not of: • Feasibility studies cost the company GH¢2000 • Test marketing expenses amounts to GH¢3000 • Variable cost will increase by 5% per annum • Selling price will increase by 10% per annum • Marketing expense will be 5% of sales revenue per year • An initial working capital investment of GH¢2000 will be made. Subsequently, net working capital at the end of each year will be equal to 10 percent of sales for that year. In the final…BIG Pharmaceuticals Ltd. has invested $330,000 to date in developing a new typeof insect repellent. The repellent is now ready for production and sale, and theMarketing Manager estimates that the product will sell 170,000 bottles in the firstyear, 210,000 bottles in the second years and 260,000 bottles a year over the nextthree years. The selling price of the insect repellent will be $6.00 a bottle andvariable costs are estimated to be $3.00 a bottle. Second- and third-year price willbe $6.99 a bottle with a variable cost of $3.50 a bottle, Fourth- and fifth yearselling price will be $7.95 with a variable cost of $3.75. Fixed costs (excludingamortization) are expected to be $210,000 a year. The figure is made up of$165,000 additional fixed costs and $45,000 fixed costs relating to the existingbusiness that will be apportioned to the new business. These costs will increaseby 5% each year.To produce the repellent, machinery and equipment costing $650,000 will have tobe purchased…BIG Pharmaceuticals Ltd. has invested $330,000 to date in developing a new typeof insect repellent. The repellent is now ready for production and sale, and theMarketing Manager estimates that the product will sell 170,000 bottles in the firstyear, 210,000 bottles in the second years and 260,000 bottles a year over the nextthree years. The selling price of the insect repellent will be $6.00 a bottle andvariable costs are estimated to be $3.00 a bottle. Second- and third-year price willbe $6.99 a bottle with a variable cost of $3.50 a bottle, Fourth- and fifth yearselling price will be $7.95 with a variable cost of $3.75. Fixed costs (excludingamortization) are expected to be $210,000 a year. The figure is made up of$165,000 additional fixed costs and $45,000 fixed costs relating to the existingbusiness that will be apportioned to the new business. These costs will increaseby 5% each year.To produce the repellent, machinery and equipment costing $650,000 will have tobe purchased…
- The production department of Y Company is planning to purchase a new machine to improve product quality. The company’s management accountant is currently evaluating two options- Buy the machine OR Rent it. The following information is available: The company has to pay £3,200 to set up the machine. Insurance costs £450 per annum. If it is bought, the new machine is depreciated on a reducing balance basis at the rate of 25%. After various calculations, the company has to pay £4,200 maintenance cost every year, and the estimated repair cost would be £300 per year. The firm will have to sell old machines, which had cost £65,000 six years ago. Apart from the above information, the £500 delivery cost is incurred for this purchase option. If it is rented, £ 4,650 per year to pay as rent. There is no cost for repair and maintenance. However, the firm is required to pay the administration charge of £650 with this rent option. For the rent option, the delivery cost remains at 20% of the £ 500…Axdew Limited is considering whether to manufacture an improved, more expensive version of their current line of best-selling lava lamps. Axdew currently spends $15,000 per year on maintenance and $80,000 on full-time salaries for staff. Maintenance costs are expected to remain the same but an additional labourer will need to be hired at an annual cost of $30,000. Manufacture of the newer version will require re-tooling of its existing machinery at a cost of $40,000. Axdew paid consultants a fee of $30,000 for a feasibility study to determine the viability of the new product. Which of the costs discussed above need to be considered by management in deciding whether to proceed with the new product? Justify your answer.In a bio-based material recycling company, the operation managers are considering a twin-screw extruder with a price of 12,000 OMR and another 2,000 OMR will be spent for shipping and installation of the extruder. The estimated net income generated from this machine is 3,500 OMR per year. The extruder will be used for 5 years, and then it will be sold for an estimated market value of 2,500 OMR. The extruder MARCS property class is 5 years. If the effective income tax rate (t) is 40% and the after-tax MARR is 10%. (a) What is the after-tax IRR for this project? (use trial and error procedure and GDS) (b) Should this extruder be purchased by the company?
- Plato Pharmaceuticals Ltd has invested £500,000 to date in developing a new type of insect repellent. The repellent is now ready for production and sale, and the marketing director estimates that the product will sell 150,000 bottles a year over the next five years. The selling price of the insect repellent will be £5 a bottle and variable costs are estimated to be £3 a bottle. Fixed costs (excluding depreciation) are expected to be £200,000 a year. This figure is made up of £160,000 additional fixed costs and £40,000 fixed costs relating to the existing business which will be apportioned to the new product. In order to produce the repellent, machinery and equipment costing £520,000 will have to be purchased immediately. The estimated residual value of this machinery and equipment in five years’ time is £100,000. The business calculates depreciation on a straight-line basis. The business has a cost of capital of 12 per cent. Ignore taxation. 1. Undertake sensitivity analysis to show…Plato Pharmaceuticals Ltd has invested £500,000 to date in developing a new type of insect repellent. The repellent is now ready for production and sale, and the marketing director estimates that the product will sell 150,000 bottles a year over the next five years. The selling price of the insect repellent will be £5 a bottle and variable costs are estimated to be £3 a bottle. Fixed costs (excluding depreciation) are expected to be £200,000 a year. This figure is made up of £160,000 additional fixed costs and £40,000 fixed costs relating to the existing business which will be apportioned to the new product. In order to produce the repellent, machinery and equipment costing £520,000 will have to be purchased immediately. The estimated residual value of this machinery and equipment in five years’ time is £100,000. The business calculates depreciation on a straight-line basis. The business has a cost of capital of 12 per cent. Ignore taxation. Required: (a) Calculate the net present…Delima Bhd is considering replacing old machine with a new one to meet the increasing demand for its product in the future. The old machine was bought five years ago for RM120,000. It can be used for another 5 years with zero salvage value. The machine can be sold now for RM50,000. The maintenance and defect costs of this new machine is are RM8,000 and RM6,000, respectively, per year. This machine is handled by three workers. Each worker is paid a salary and other benefits RM15,000 per year. This benefits will not continue paid if new machine is bought. In addition, only two workers will be required if the new machine is bought and the company intends to terminate one of them. A compensation of RM60,000 will be paid to him immediately on termination. The new machine costs RM200,000. Transportation cost of RM8,000 and import duties of RM16,000 will be incurred. In order to use this machine efficiently, the company has to send the two workers for training at a cost of RM20,0000. The…