Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Chapter 11, Problem 3ADM

(a)

To determine

Capital investment for sustainability:

Capital investment for sustainability refers to the investment which is earned maximum profit while attempting to preserve the environment, economy and future needs. There are some objectives in the capital investment sustainability as follows:

  • Minimize resource waste and environmental degradation,
  • Develop new sustainable markets,
  • Reduce litigation risks, and
  • Maintain an attractive and safe working environment.

Net present value method:

Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is determined by the business, based on the net income from the investment, and it is also called as the discounted cash flow method.

The annual contribution margin for manufacturing and selling the silica-blended tries.

(b)

To determine

To determine:  Annual cash flows of manufacturing and selling silica-blended tires.

(c)

To determine

To calculate: The net present value of the investment of AS Incorporation.

(d)

To determine

To prepare:  The questions the company must consider for recycling silica-blended tires.

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Chapter 11 Solutions

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