Your storage firm has been offered $95,700 in one year to store some goods for one year. Assume your costs are $95,200, payable immediately, and the cost of capital is 8.2%. Should you take the contract? The NPV will be S (Round to the nearest cent.) Should you take the contract? (Select from the drop-down menu.) The contract be taken.
Q: Micro Enterprises has the capacity to produce 10,000 widgets a month, and currently makes and sells…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: You are preparing to produce some goods for sale. You will sell them in one year and you will incur…
A: Net present value is difference between cash flow and initial cost.
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Net Present Value (NPV) Net present value is defined as the summation of the present value of cash…
Q: Wrangler Western has some of its jeans stone-washed under a contract with an independent contractor,…
A: Present Value of annuity = Annuity1+interest raten Present worth in Year 0 = Sum of present…
Q: OM Construction Company must choose between two types of cranes. Crane A costs $600,000, will last…
A:
Q: Joe Georgie, owner of Georgie Manufacturing, is considering whether to produce a new product. He has…
A: The break even sales are the sales where business earns no profit no loss during the period.
Q: Teegin has just received a report indicating that KarlAuto could purchase the entire annual output…
A:
Q: Your storage firm has been offered $95,400 in one year to store some goods for one year. Assume your…
A: Net present value will be calculated as difference between the present value of future cash inflows…
Q: camber crporation has to decide if they can finance purchasing 10 new machines for all their…
A: All financials below are in million.Total capital expenditure = 10 machines x 1.73 / machine =…
Q: Gazapizm Corporation is a manufacturing company and has estimated that they need $2,400,000 to put a…
A: Firm requires funds for new projects or existing operations. Firm can arrange the funds through long…
Q: Mountain Corporation is considering purchasing one of two photocopiers. The first copier will have…
A:
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Cash flow (Year 0) = - $7,970,000 Cash flow (Year 1 - 3) = $4,940,000 Internal rate of return (IRR)…
Q: You are preparing to produce some goods for sale. You will sell them in one year and you will incur…
A: The net present value of a project or investment is the measure of the profitability of the project…
Q: Assume that Cane expects to produce and sell 90,000 Betas during the current year. One of…
A: Since the costing information is not given, my answer would be based on revenue. Financial…
Q: The Campbell Company is considering adding a robotic paint sprayer to its production line. The…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: The Waygate Corporation is interested in contracting out a testing function.Two firms have submitted…
A: The present value analysis can be used to find out the actual value of the project at the beginning…
Q: Guthrie Enterprises needs someone to supply it with 145,000 cartons of machine screws per year to…
A: The question is based on the concept of Cost Accounting
Q: Find break-even point where a manager has determined that a potential new product can be sold at a…
A: Break even point is the situation where companies total cost will be equal to its total revenue…
Q: g factory has been offered a contract to produce a part for a new printer. The contract would last…
A: Solution:- Internal Rate of Return (IRR) means the rate of return the project is yielding. At IRR,…
Q: A car dealer must pay $20,000 for each car purchased.The annual holding cost is estimated to be 25%…
A: Economic order quantity (EOQ) is the perfect order quantity a company ought to buy to play down…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Initial cash flow = - $8.07 million Annual Cash flow = $5.21 million discount rate = 0.076 (i.e.…
Q: Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 40, and it…
A: Trade credit is the sales made on credit, recorded as accounts receivables by the seller, and as…
Q: Burmy Company has contacted Stufful with an offer to sell them 5,000 of the subassemblies for P22.00…
A: Given: Particulars Make Units 5000 Direct material ₱1.00 Direct labor ₱10.00 Variable…
Q: Assume that Cane expects to produce and sell 80,000 Alphas during the current year. One of…
A: Since the costing information is not given, my answer would be based on revenue.
Q: American pany estimates that 60,000 special zippers will used in the manufacture of men's jackets…
A: The question is based on the concept of Financial Management.
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Net Present Value(NPV) is one of the modern techniques of capital budgeting which considers the time…
Q: The initial purchase price of a new stamp press is $6,000. The firm will spend $5,000 on shipping…
A: Initial purchase price of a new stamp is $6,000 Shipping and installation cost us $5,000 Training…
Q: A company is bidding to buy a fleet of lorries for £ 15,600,000. Payment on delivery 1,000,000 TL in…
A: Advance is an amount that is paid before the delivery of an asset is made.
Q: Happy Cleaners needs a new steam machine that costs $100,000. The company is evaluating whether it…
A: Lease payments are made at the beginning of the year. So, cash out flow will occur from year 0.…
Q: Martin Enterprises needs someone to supply it with 110,000 cartons of machine screws per year to…
A: Fixed Cost is $335,000 Salvage Value is $93,000 Variable Cost is $9.65 Units is 110,000 Machine Cost…
Q: Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 40, and it…
A: Trade credit: A trade credit is an agreement or understanding between agents engaged in business…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Net present value (NPV) is excess of present value of cash inflows over present value of cash…
Q: Alson Enterprises needs someone to supply it with 185,000 cartons of machine screw per year to…
A: Under the straight-line method, the depreciation is computed by dividing the initial cost by the…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Net present value (NPV) and internal rate of return (IRR) are the two most commonly used capital…
Q: Your company is considering a purchase of a $580,000 computer-based order entry system. The system…
A: Calculating the of the depreciation expenses for the equipment. We have,Depreciation expenses =…
Q: Wrangler Western has some of its jeans stonewashed under a contract with independent U.S. Garment…
A: It is given that the firm does the stonewash under a contract with an independent contractor who has…
Q: You have a opportunity to make a investment that has $10.000,000 landing, hachine, outsourcing…
A: Capital budgeting is the process by which a corporation examines potential large projects or…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: The net present value (NPV) is one of the capital budgeting technique. The NPV is calculated by…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: NPV indicates the excess value of project with respect to the fair value of the project. NPV is the…
Q: Your options for shipping $100,000 of machine parts from Baltimore to Kuala Lumpur, Malaysia, are…
A: Shipping cost refers to the cost of transferring the goods from one location to another. Holding…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Given, The cash flows from contract is $4.83 million Upfront costs $8.13 million Discount rate is…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: NPV is the difference of present value of cash inflows and initial outflows. A project is acceptable…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Data given: Cash flow per year = $5 million Set up cost = $8 million Discount rate =8% Life of…
Q: A light-duty pickup truck has a manufacturer’s suggested retail price (MSRP) of $14,000 on its…
A: Information Provided: MSRP = $14,000 Down payment = $1238 Monthly payment = $249 Oppurtunity cost =…
Q: You are contemplating on purchasing a new motorcycle. Kangaroo Autos and Turtle Motors are both…
A: An asset can be purchased by paying cash or by paying regular installments or a combination of cash…
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Given, The initial cost is $8.02 million Cashflows per years $4.83 million for 3 years Discount rate…
Q: Due to a cool spring season, Petra’s pool installation business has not had the sales she…
A: Credit amount (C) = $42800 - $5000 = $37800 n = 24 payments r = 4.8% per annum = 0.4% per month…
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
- Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
- Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the bus 7,000 miles and paid a total of $1,360 in June. In October. Able Transport paid $1,280 for the 5,000 miles driven. If Able Transport uses the high-low method to analyze costs, how much would Able Transport pay in December, if they drove 6,000 miles?Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)
- Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $55,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $25 and the cost per unit is $7.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.
- Oberweis Dairy switched from delivery trucks with regular gasoline engines to ones with diesel engines. The diesel trucks cost $6,000 more than the ordinary gasoline trucks but costs $1,800 per year less to operate. Assume that Oberweis saves the operating costs at the end of each month. If Oberweis uses a discount rate of 1% per month, approximately how many months, at a minimum, must the diesel trucks remain in service for the switch to be sensible?Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the tour bus 4,000 miles and paid a total of $1,250 in March. In April, they paid $970 for 3.000 miles. What is the variable cost per mile if Able Transport uses the high-low method to analyze costs?Your storage firm has been offered $95,400 in one year to store some goods for one year. Assume your costs are $96,700, payable immediately, and the cost of capital is 8.4%. Should you take the contract? The NPV Will Be $______ (Round to the nearest cent)