Waterway’s Shingle Corporation is considering the purchase of a new automated shingle-cutting machine. The new machine will reduce variable labor costs but will increase depreciation expense. Contribution margin is expected to increase from $247,500 to $283,500. Net income is expected to be the same at $45,000. Compute the degree of operation leverage before and after the purchase of the new equipment. (Round answers to 1 decimal place) Degree of operating leverage (old)? Degree of operating leverage (new)?

Q: Hana Inc. is considering an investment in new equipment that will be used to manufacture a…

A: Average Rate of ReturnAverage Rate of Return measures the profitability of the investments on the…

Q: ing could be purchased for sole use by the corporation at a total price of $4.5 million, of which…

A: The answer is stated below:

Q: The project manager of a steel manufacturing factory in Hamilton puts forth a proposal to the senior…

A: There is no tax rate is given. Hence, the increase in profits should be considered as net cash…

Q: Starling Co. is considering disposing of a machine with a book value of $24,500 and estimated…

A:

Q: A flour mill is considering buying a new jumbo sifter, which would have an installed cost of…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: ormation applies questions displayed below Beacon Company is considering automating its production…

A: Solution 4:   Current (no automation)   Proposed (Automation)     88000 Units 124000 units…

Q: than Butler, process engineer, knows that the acceptance of a new process design will depend on its…

A: Requirement1                                                              Schedule of cash flow…

Q: Howell Petroleum is considering a new project that complements its existing business. The machine…

A: Net Present Value of the project needs to be determined to evaluate the capital budgeting decision.…

Q: Kaufman Chemical is evaluating the purchase of a new multi-stage centrifugal compressor for its…

A: Before investing in new assets, profitability is evaluated by using various methods like NPV, IRR,…

Q: Bryant Company has a factory machine with a book value of $90,000 and a remaining useful life of 5…

A: Total Variable manufacturing costs if Equipment is retained = Annual Variable manufacturing costs x…

Q: WT paper corporation is considering adding another machine for the manufacture of corrugated…

A: Capital budgeting helps the business firm to determine the major capital expenditures and the…

Q: At times firms will need to decide if they want to continue to use their current equipment or…

A: With regards to Investment examination, it tends to be exceptionally advantageous to realize how to…

Q: Hana Inc. is considering an investment in new equipment that will be used to manufacture a…

A: Calculate the net income: Selling price per unit $173 Less:Total cost per unit ($152.60) Net…

Q: Marigold Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The…

A: Answer- Working Note :   Cost to Manufacture = DL + DM + VFOH  = 8.80+ 28.90+ 4.50  = $ 42.20

Q: Natural Foods Inc. is planning to invest in new manufacturing equipment to make a new garden tool.…

A: Net cash flows indicate the forecast of cash inflows and outflows for a particular period.

Q: An automobile company needs to decide of outsourcing shafts or producing shafts in the company. If…

A: An automobile needs to decide of outsourcing or producing shafts in the company. Outsourcing shafts…

Q: Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost…

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

Q: Starling Co. is considering disposing of a machine with a book value of $21,600 and estimated…

A: Increase (decrease) in  income = Savings in total annual variable manufacturing costs - Net…

Q: Thurston Petroleum is considering a new project that complements its existing business. The machine…

A: Hello, since your submission includes two questions, we have solved the first question as per our…

Q: Concord Company has a factory machine with a book value of $88,100 and a remaining useful life of 7…

A: Introduction: Manufacturing costs include monies spent on direct expenses, such as the amount your…

Q: The Greenleaf Company is considering purchasing a new set of air-electric quill units to replacean…

A:

Q: A flour mill is considering buying a new jumbo sifter, which would have an installed cost of…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: Noor Taxis Co. owns and runs 350 taxis and had sales of OMR 10 million in the last year. Noor Taxis…

A: Solution-       Cost of implement   2100000 Relevant Depreciation 420000   irrelevant…

Q: Alliance Manufacturing Company is considering the purchase of a new automated drill press to replace…

A: Cost of Machine = $25,000 Cost Saving = $6,000 Salvage Value = $1,000 Cost of capital = 14% Tax Rate…

Q: Starling Co. is considering disposing of a machine with a book value of $22,200 and estimated…

A: Cost savings per year = 23,400 - 19,900 = 3,500 For 5 years = 3,500 x 5 = $17,500 Old machine sale…

Q: a) What is the accumulated depreciation of the old sifter? b) What is the current book value of the…

A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: Medavoy Company is considering a new project that complements its existing business. The machine…

A: Net present value is the difference between the present value of cash flow and initial investment of…

Q: Swifty Industries is considering the purchase of new equipment costing $432,000 to replace existing…

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

Q: Ford Motor Company is considering purchasing a new piece of equipment for one of its plants. The…

A: Contribution margin =      Sales - variable cost / sales - variable…

Q: Amold Inc. is considering a proposal to manufacture high-end protein bars used as food supplements…

A: In such project plans, we should compute the free cash flow every year, and then we should compute…

Q: Alliance Manufacturing Company is considering the purchase of a new automated drill press to replace…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: Culver Industries is considering the purchase of new equipment costing $732,000 to replace existing…

A: Workings: Purchase value = 732000 Sale of old machinery = 109800. Salvage value = 122000 Units…

Q: Bartlet Industries is considering a new product line and will need to replace older equipment with…

A: The total capital investment is calculated by adding installation cost, market research cost and…

Q: A small office building could be purchased for sole use by the corporation at a total price of $5.3…

A: In this question , we would be preparing cashflow statement for the ABC Corporation.    Note #…

Q: Bramble Industries is considering the purchase of new equipment costing $1,430,000 to replace…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: edavoy Company is considering a new project that complements its existing business. The machine…

A: NPV stands for net present value. It is the sum of present values of all future cash flows from a…

Q: The company DstriBut.inc decides to take a technological shift by replacing its old distribution…

A: NPV NPV is a capital budgeting tool to decide on whether the capital project should be accepted or…

Q: Expando, Inc., is considering the possibility of building an additional factory that would produce a…

A: NPV is the net present value is the difference between the present value of cash flow and initial…

Q: Bridgeport Industries is considering the purchase of new equipment costing $1,280,000 to replace…

A: Year0 - purchase of the asset Year 1- year 5 : occurs the revenue and cost for each following year…

Q: Starling Co. is considering disposing of a machine with a book value of $12,500 and estimated…

A: Here we will not consider  time  value of money  as the discount rate is not given

Q: Adams Corporation is considering the purchase of equipment employing advanced technology to lower…

A: Opportunity costs reflect the potential advantages that are overlooked by a person, investor, or…

Q: A flour mill is considering buying a new jumbo sifter, which would have an installed cost of…

A: Parts A-D:Excel Spreadsheet:

Q: The present value of the net initial cash flows of this project today is closest to: a) CAD…

A: Net initial cash flows mean those cash flows which a company is going to incur for the investment in…

Q: Micro Tek Inc. is considering an investment in new equipment that will be used to manufacture a…

A: Formula: Average Investment = ( Initial investment + Residual value ) / 2

Q: Whispering Winds Industries is considering the purchase of new equipment costing $1,500,000 to…

A: Price of New equiment = 1500000 SAlvage Value of equipment = 120000 Initial Investment =…

Q: Howell Petroleum is considering a new project that complements its existing business. The machine…

A: Net present value (NPV) is the present value of cash received in excess of present value of cash…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.