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- The manager at a Sherwin-Williams store has decided to purchase a new $30,000 paint mixing machine with high-tech instrumentation for matching color and other components. The machine may be paid for in one of two ways: (1) pay the full price now, less a 3% discount, or (2) pay $5,000 now,$8,000 one year from now, and $6,000 at the end of each of the next 4 years. If interest is 12% compounded annually, determine which way is best for themanager to make the purchase.Wall’s Pharmacy will have to sell a new product that has an estimated revenue of $5,100 per month and costs of $1,000 per month with an initial purchase of $28,000. How long will Wall's Pharmacy have to sell a new product if the MARR is 0% per month? Wall's Pharmacy will have to sell a new product for __ months.Assume that a customer shops at a local grocery store spending an average of $350 a week, resulting in a retailer profit of $30 each week from this customer. Assuming the shopper visits the store all 52 weeks of the year, calculate the customer lifetime value if this shopper remains loyal over a 10-year life span. Also, assume a 6 percent annual interest rate and no initial cost to acquire the customer. How much does the customer yield per year in profits for this retailer? (Round to the nearest dollar.)
- Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order. Q. Would this opportunity cost be recorded in the accounting system? Why?Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order. Q. What other factors should Best Trim consider when making its decision?Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order. Q. What is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of in 12 monthly purchases of 17,000 units per order?
- Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order. Q. Should Best Trim purchase 204,000 units at the start of the year or 17,000 units each month? Show your calculations.It costs $30,000 to retrofit the gasoline pumps at a certain filling station so the pumps can dispense E85 fuel. if the station makes a profit of $0.09 per gallon from selling E85 and sells an average of 25,000 gallons of E85 per month, how many months will it take for the owner to recoup her 30,000 investment in the retrofitted pumps? the interest rate is 2% per month. How would you do this with an interest chart and a calculatorYou are thinking of opening a small copy shop. It costs $5500 to rent a copier for a year, and it costs $0.03 per copy to operate the copier. Other fixed costs of running the store will amount to $450 per month. You plan to charge an average of $0.10 per copy, and the store will be open 365 days per year. Each copier can make up to 100,000 copies per year. a) For a charge per copy between $0.07 to $0.11 and daily demands of 500, 1000, 1500, and 2000 copies per day, find annual profit. That is, find annual profit for eachof these combinations of charge per copy and daily demand. b) If you charge 0.09 per copy, what daily demand for copies will allow you to break even? c) Graph profit as a function for a charge per copy (between $0.07 to $0.11) for a daily demand of 500 copies; for a daily demand of 2000 copies. Interpret your graphs and label your graphs properly
- You are thinking of opening a small copy shop. It costs $3500 to rent a copier for a year, and it costs $0.03 per copy to operate the copier. Other fixed costs of running the store will amount to $350 per month. You plan to charge an average of $0.10 per copy, and the store will be open 365 days per year. Each copier can make up to 100,000* copies per year. a) For a charge per copy between $0.07 to $0.11 and daily demands of 500, 1000, 1500, and 2000 copies per day, find annual profit. That is, find annual profit for each of these combinations of charge per copy and daily demand. use a two way tableThe ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. Suppose that ABC would like to realize a monthly profit of $50,000. How many units must they sell each month to realize this profit?Blush Inc., sold a kitchen appliance that costs $1,000.00 with 5-year financing to a customer who made a down payment of $510.00. What should be the size of the loan payments at the end of every month if interest of 9.00% compounded monthly is charged? You plan to save money for a down payment of $39,000 to purchase an apartment. You can only afford to save $6,000 at the end of every 6 months into an account that earns interest at 4.25% compounded monthly. How long will it take you to save the planned amount?