Misra Inc. forecasts a free cash flow of $ 35 million in Year 3, ie, at t = 3, and it expects FCF to grow at a constant rate of 5.5% thereafter. If the weighted average cost of capital (WACC) is 10.0% and the cost of equity is 15.0%, what is the horizon, or terminal, value in millions at t = 3?
Answer:
the answer for this question is 1289.44
A mining company is evaluating when to open a gold mine. The mine has 100,000 ounces of gold left that can be mined and mining operations will produce 10,000 ounces per year. The price of gold from the mine will be guaranteed for the remaining life of the mine through the gold futures contracts. If the mine is opened today, each ounce of gold will generate an after-tax cash flow (= total or net cash flow) of $1,300 per ounce. If the company waits one year, there is a 70 percent probability that the contract price will generate an after-tax cash flow of $1,550 per ounce and a 30 percent probability that the after-tax cash flow will be $1,200 per ounce. The required return on the gold mine is 15 percent and it will cost $30,000,000 to open the mine regardless of whether the mine is open today or in one year. Compute the value of the option to wait today.
Answer:
The value of the option to wait today = $2,500,000
Explanation:
a) Data and Calculations:
Quantity of gold left in the mine = 100,000 ounces
Quantity of gold to be produced yearly = 10,000 ounces
Estimated life of mine = 10 years (100,000/10,000)
After-tax cash flow if mine is opened today = $1,300 per ounce
After-tax cash flow if mine is opened a year later:
Expected value = ($1,550 * 70%) + ($1,200 * 30%) = $1,325 per ounce
Comparison of the values of opening options:
Mine opened Mine opened
today a year later
After-tax cash flow per ounce $1,300 $1,325
Quantity of gold in the mine 100,000 100,000
Total after-tax cash flows $130,000,000 $132,500,000
Cost of opening mine 30,000,000 30,000,000
Required return (15%) 4,500,000 4,500,000
Actual returns from mine $100,000,000 $102,500,000
Therefore, the value of option to wait:
Returns from mine opened next year = $102,500,000
Returns from mine opened today = 100,000,000
Value of the option to wait today = $2,500,000
how to manage stress throughout the year
You are running a hypothetical e-business in this course. Suppose your company only have one employee and three customers who do not access your website frequently. Your company also does not need to process a lot of information; in this case, to save your money, which types of computers does your company need to fulfill such a computing need?
Answer:
do the challnge in brainly it gives u points !!!!
Explanation:
According to the given hypothetical e-business situation, simple personal computers can be used to fulfill the required computing needs.
What is e-business?"E-business is an electronic business or transaction in which user shares the information online. In this, information, products, and services can be shared between business, groups, and individuals and considered as an essential activities."
What is personal computer?"Personal computer is a computer which is a multi-purpose system and its size, capabilities and prize makes it feasible for individual use."
In the given situation, the analyses of data is less which can be fulfilled by the personal computers only and there is no need to purchase systems with special features. The employee can fulfill the requirements of current e-business with the help of any personal computer like desktop, laptop, etc.
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Shining Cookie Company, Inc., in Murfreesboro, TN bought a new ice cream maker at the beginning of the year at a cost of $12,000. The estimated useful life was four years, and the residual value was $960. Assume that the estimated productive life of the machine was 9,200 hours. Actual annual usage was 3,680 hours in year 1; 2,760 hours in year 2; 1,840 hours in year 3; and 920 hours in year 4.
Required:
1. Complete a separate depreciation schedule for each of the alternative methods. (Do not round intermediate calculations.)
a. Straight-line.
b. Units-of-production (use four decimal places for the per unit output factor).
c. Double-declining-balance.
Answer:
a. Straight Line :
Year 1 : $2760
Year 2 : $2760
Year 3 : $2760
Year 4 : $2760
b. Units of production :
Year 1 : $4416
Year 2 : $3312
Year 3 : $2208
Year 4 : $1104
a. Double Declining Balance :
Year 1 : $6000
Year 2 : $3000
Year 3 : $1500
Year 4 : $560
Explanation:
a. Straight Line Depreciation:
( Cost of Ice cream maker - Residual Value ) / Useful life in years
( $12,000 - $960 ) / 4 = $2760
b. Units of production :
( Cost of Ice cream maker / Total Productive machine hours ) * Annual Usage
Year 1 ($12,000 / 9200 ) * 3680 = 4416
Year 2 ($12,000 / 9200 ) * 2760 = 3312
Year 3 ($12,000 / 9200 ) * 1840 = 2208
Year 4 ($12,000 / 9200 ) * 920 = 1104
c. Double declining method :
Year 1: $12,000 * 50% = $6000
Year 2 : $12,000 * 25% = $3000
Year 3 : $12,000 * 12.5% = $1500
Year 4 : $12,000 * 6.25% = $560
The Rob Wallace Corporation has a sales budget for next month of $400,000. Cost of goods sold is expected to be $250,000. All goods are paid for in the month following their purchase. The beginning inventory of merchandise is $16,000, and an ending inventory of $12,000 is desired. Beginning accounts payable is $52,000. How much merchandise inventory will The Rob Wallace Corporation need to purchase next month
Answer: $246000
Explanation:
The amount of merchandise inventory that The Rob Wallace Corporation need to purchase next month will be:
Expected Cost of goods sold = $250000
Less: Beginning Inventory = $16000
Add: Desired Ending Inventory = $12000
The, the Required Purchase of merchandise inventory will be:
= $250000 + $12000 - $16000
= $246000
Harrison Forklift's pension expense includes a service cost of $10 million. Harrison began the year with a pension liability of $28 million (underfunded pension plan). 1. Interest cost, $6; expected return on assets, $4; amortization of net loss, $2.2. Interest cost, $6; expected return on assets, $4; amortization of net gain, $2. 3. Interest cost, $6; expected return on assets, $4; amortization of net loss, $2; amortization of prior service cost, $3 million.Required:Prepare the appropriate general journal entries to record Harrison's pension expense in each of the above independent situations regarding the other components of pension expense ($ in millions).
Answer:
1. ($ in millions)
Dr Pension expense (total) $14
Dr Plan assets (expected return on assets)$4
Cr PBO $16
Cr Net loss—AOCI(current amortization) $2
2 ($ in millions)
Dr Pension expense (total) $10
Dr Plan assets (expected return on assets) $4
Dr Net gain—AOCI(current amortization) $2
Cr PBO $16
($10 service cost + $6 interest cost)
3. ($ in millions)
Dr Pension expense (total) $17
Dr Plan assets (expected return on assets) $4
Cr PBO $16
Cr Net loss—AOCI(current amortization) $2
Cr Prior service cost(current amortization) $3
Explanation:
Preparation of the appropriate general journal entries to record Harrison's pension expense in
1. ($ in millions)
Dr Pension expense (total) $14
($16+$2-$4)
Dr Plan assets (expected return on assets)$4
Cr PBO $16
($10 service cost + $6 interest cost)
Cr Net loss—AOCI(current amortization) $2
2 ($ in millions)
Dr Pension expense (total) $10
($16-$4-$2)
Dr Plan assets (expected return on assets) $4
Dr Net gain—AOCI(current amortization) $2
Cr PBO $16
($10 service cost + $6 interest cost)
3. ($ in millions)
Dr Pension expense (total) $17
($16+$2+$3-$4)
Dr Plan assets (expected return on assets) $4
Cr PBO($10 service cost + $6 interest cost) $16
Cr Net loss—AOCI(current amortization) $2
Cr Prior service cost(current amortization) $3
Started the business when it acquired $61,000 cash from the issue of common stock. Paid $21,300 cash to purchase inventory. Sold inventory costing $12,100 for $27,700 cash. Physically counted inventory; had inventory of $7,400 on hand at the end of the accounting period. Required a. Record the events in the T-accounts provided. b. Prepare an income statement and balance sheet.
Answer:
Part a
Transaction 1
Debit : Cash $61,000
Credit : Common Stock $61,000
Transaction 2
Debit : Merchandise $21,300
Credit : Cash $21,300
Transaction 3
Debit : Cash $27,700
Debit : Cost of Sales $12,100
Credit : Sales Revenue $27,700
Credit : Merchandise $12,100
Part b
Income Statement for the year
Sales $27,700
Less Cost of Sales
Opening Stock $0
Purchases $21,300
Less Closing Inventory ($7,400) ($13,900)
Gross Profit $13,800
Balance Sheet as at end of the year
ASSETS
Inventory $7,400
Cash ($61,000 - $21,300 + $27,700) $67,400
TOTAL ASSETS $74,800
EQUITY AND LIABILITIES
Common Stock $61,000
Net Profit $13,800
TOTAL EQUITY AND LIABILITIES $74,800
Explanation:
Step 1 : Journal entries
Tip - there are two or more accounts affected by transactions. Identify these and record the Debit and Credit
Step 2 : Income Statement
The Income Statement accounts for Revenues / Incomes and Expenses. Identify Accounts for these and Record them in this statement.
Step 2 : Balance Sheet
The Balance Sheet accounts for Assets, Liabilities and Equity. Identify Accounts for these and record them in this statement.
Suppose the following information was taken from the 2022 financial statements of FedEx Corporation, a major global transportation/delivery company. (in millions) 2022 2021 Accounts receivable (gross) $ 3,740 $ 4,610 Accounts receivable (net) 3,400 4,350 Allowance for doubtful accounts 340 260 Sales revenue 33,325 35,825 Total current assets 7,170 7,292 Answer each of the following questions. (a) Calculate the accounts receivable turnover and the average collection period for 2022 for FedEx. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.) Accounts receivable turnover enter the accounts receivable turnover in times rounded to 1 decimal place times The average collection period for 2022
Answer:
Accounts Receivable Turnover 8.6 times
Average collections period 42.44 days
Explanation:
A. Calculation to determine the average collection period for 2022 using this formula
Accounts Receivable Turnover = Sales/Average accounts receivables
Let plug in the formula
Accounts Receivable Turnover = 33,325 /[(3,400+4350)/2]
Accounts Receivable Turnover =33,325/(7,750/2)
Accounts Receivable Turnover =33,325/3875
Accounts Receivable Turnover = 8.6 times
Therefore the Accounts Receivable Turnover will be 8.6 times
B. Calculation to determine the Average collections period using this formula
Average collections period = 365/Accounts Receivable Turnover
Let plug in the formula
Average collections period= 365/8.6
Average collections period= 42.44 days
Therefore The Average collections period will be 42.44 days
Uptown Bank provides lockbox services. They estimate that you can reduce your average mail time by 2.2 days and your combined clearing and processing time by .75 days by implementing their system. Your firm receives 65 checks a day with an average value of $298 each. The current T-Bill rate is .01 percent per day. Assume a 365-day year. The bank will charge your firm $.15 per check. What is the annual net savings from installing this system?
Answer: $1473.067
Explanation:
First, we calculate the total time that's saved by the firm when it installs the lockbox services. This will be:
= 2.2 days + 0.75 days
= 2.95 days
Then, the gross amount that the firm will save will be:
= 65 × 2.95 × 298 × 0.01%
= $5.7142 per day
Since the bank charges the firm $0.15 per check and the firm receives 65 checks per day, the total cost to the firm will then be:
= 65 × $0.15
= $9.75 per day
The net loss will then be calculated as:
= $9.75 - $5.7142
= $4.0358 per day
Then, to get that for annual, we multiply the above value by 365. This will be:
= $4.0358 × 365
= $1473.067 per annum.
A company normally sells it products for $20 per unit, which includes a profit margin of 25%. However, the
selling price has fallen to $15 per unit. This company's current inventory consists 200 units purchased at $16
per unit. Replacement cost has now fallen to $13 per unit. Calculate the value of inventory at the lower of
cost or market.
Answer:
$2,600
Explanation:
The computation of the inventory value is shown below:
Market value = 200 units × $16
= $3,200
And, the cost is
= 200 units × $13
= $2,600
So the lower of cost or market value would be considered
Since $2,600 would be lower so the same would be equivalent to the inventory amount
Marriott International is a worldwide operator, franchisor, and licensor of hotels, residential, and timeshare properties totaling nearly $1.8 billion in net property and equipment. Assume that Marriott replaced furniture that had been used in the business for five years. The records of the company reflected the following regarding the sale of the existing furniture:Furniture (cost) Accumulated depreciation $8,000,000 7,700,000 Required: Prepare the journal entry for the disposal of the furniture, assuming that it was sold for: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars not in millions.) a. $300,000 cash b. $900,000 cash c. $100,000 cash
Answer:
Net Book Value of furniture:
= Cost price - Accumulated depreciation
= 8,000,000 - 7,700,000
= $300,000
a. $300,000 cash
Account Title Debit Credit
Cash $300,000
Accumulated Depreciation $7,700,000
Furniture $8,000,000
b. $900,000 cash
Account Title Debit Credit
Cash $900,000
Accumulated Depreciation $7,700,000
Furniture $8,000,000
Gain on disposal $600,000
c. $100,000 cash
Account Title Debit Credit
Cash $100,000
Accumulated Depreciation $7,700,000
Loss on Disposal $200,000
Furniture $8,000,000
Fundamental analysis is likely to yield best results for _______. Group of answer choices stocks with very few analysts following NYSE stocks stocks with many analysts following stocks that are frequently in the news stocks of firms that have recently announced earnings
Answer:
stocks with very few analysts following
Explanation:
Fundamental analysis is chosen to yield for the best result for those stocks that are followed by a very less analyst also it would be helpful for maximizing the rate of return by seeing the stock undervaluation in the case when there is a difference in the price and that cannot be seen so this represent that these stocks would have the maximum rate of return
hence, the first option is correct
A holiday sales flyer advertised a video game system for a significantly reduced price and
video game with purchase. Later that day, the sales associate told you that the store is out of
both items. Instead, you were offered a different system and games at full retail prices. What is this type of fraud called?
On January 1, 2021, for $18.9 million, Cenotaph Company purchased 10% bonds, dated January 1, 2021, with a face amount of $20.9 million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method. 2. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.
Answer:
1. Dr Interest expense $1,134million
Cr Discount on bonds payable $89,000
Cr Cash $1,045million
2. December 31,2021
Dr Interest expense $1,141,200
Cr Discount on bonds payable 96,200
Cr Cash $1,045,000
Explanation:
1. Preparation of the journal entry to record interest on June 30, 2021, using the effective interest method.
June 30,2021
Dr Interest expense $1,134million
[$18.9 million x 12%.x 6/12]
Cr Discount on bonds payable $89,000
($1,134million-$1,045million)
Cash [$20.9 million x 10% x 6/12] $1,045million
[To record semi-annual interest payment]
2. Prepareion the journal entry to record interest on December 31, 2021, using the effective interest method.
Date Account title and Explanation Debit Credit
December 31,2021 Interest expense [($18.9 million + $120,000) x 12% x 6/12] $1,141,200
Discount on bonds payable 96,200
$1,141,200-$1,045,000
Cash [$20.9 million x 10% x 6/12] $1,045,000
[To record semi-annual interest payment]
Drag each label to the correct location on the image.
Identify the features of stocks and bonds.
There are various types of investments. The most common type of investments are Bonds and Stocks.
What is difference between Bond and Stock?A bond is an investment which is considered as less risky because it provides fixed coupon rate as return.
A Stock is considered as risky investment because its returns vary.
The features of Bond are : It has Coupon rate, Face value and Maturity date
The features of Stock are : It has Closing Price
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Answer:
stock- closing price; bond- coupon rate, face value, maturity date
Explanation:
In 2013 cumulative preferred shareholders should have received a dividend of $10,000, but the company didn't pay a dividend. In 2014 the preferred shareholders should receive a distribution of $11,000. If the company pays $50,000 in 2014 of dividends how much will the preferred shareholders receive
Answer: $21,000
Explanation:
Cumulative preference shares should always get paid their dividends. If a situation arises where the company is unable to pay this dividend in a year, the dividends will be accrued until such a time as the company is able to pay.
Dividend to be received in 2014 is therefore:
= 2013 dividend that was not paid + 2014 dividend
= 10,000 + 11,000
= $21,000
Carr Corporation has provided the following information for its most recent month of operation: sales $8,000; beginning inventory $1,000; ending inventory $2,000 and gross profit $5,000. How much were Carr's inventory purchases during the period?a. $9,000.00 b. $5,000.00 c. $6,000.00 d. $4,000.00
Answer:
d. $4,000.00
Explanation:
This question presents an incomplete record scenario. With the Purchases amount missing.
Find the Purchases amount by preparing a Trading Account and determine the missing Purchases Amount.
Carr's inventory purchases during the period was $2,000
Trading Account
Sales $8,000
Less Cost of Sales
beginning inventory $1,000
Add Purchases $4,000
Less Ending inventory ($2,000) ($3,000)
Gross profit $5,000
If D0 = $2.00, g (which is constant) = 6%, and P0 = $40, what is the stock's expected dividend yield for the coming year?
Red Oak Inc., a furniture manufacturing company, manufactures furniture only when an order is received. It coordinates and integrates the activities of its suppliers, designers, and carpenters to ensure an efficient production cycle. This enables Red Oak Inc. to deliver the products to customers within five working days. This is an example of _______ management.
Answer:
Supply Chain
Explanation:
Supply chain management can be regarded as management of processes involving transformation of goods and services from raw materials into final desired products as well as their flow. Supply chain management deals with active streamlining of business activities of supply-side so that customers values can be maximized and competitive advantage can be gained in market
Calculate Tim's marginal revenue and marginal cost for the first seven frying pans he produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.
Answer:
1. Profit maximization using total cost and total revenue curves Suppose Juanita runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $20 per teddy bear. The following graph shows Juanita's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Juanita produces. Total Revenue Total Cost Profit TOTAL COST AND REVENUE (Dollars) 0 1 2 6 7 8 3 4 5 QUANTITY (Teddy bears) Calculate Juanita's marginal revenue and marginal cost for the first seven teddy bears she produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.
Marginal Revenue Marginal Cost COSTS AND REVENUE (Dollars per teddy bear) 0 1 2 6 7 8 3 4 5 QUANTITY (Teddy bears) Juanita's profit is maximized when she produces teddy bears. When she does this, the marginal cost of the last teddy bear she produces is , which is than the price Juanita receives for each teddy bear she sells. The marginal cost of producing an additional teddy bear (that is, one more teddy bear than would maximize her profit) is $ , which is than the price Juanita receives for each teddy bear she sells. Therefore, Juanita's profit-maximizing quantity corresponds to the intersection of the curves. Because Juanita is a price taker, this last condition can also be written as
The following transactions were completed by The Wild Trout Gallery during the current fiscal year ended December 31: Jan. 19. Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $1,935 cash in full payment of Arlene’s account. Apr. 3. Wrote off the $11,090 balance owed by Premier GS Co., which is bankrupt. July 16. Received 25% of the $19,900 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. Nov. 23. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $3,155 cash in full payment. Dec. 31. Wrote off the following accounts as uncollectible (one entry): Cavey Co.,$8,340; Fogle Co., $2,475; Lake Furniture, $6,365; Melinda Shryer, $1,800. Dec. 31. Based on an analysis of the $979,800 of accounts receivable, it was estimated that $42,600 will be uncollectible. Journalized the adjusting entry.
Answer:
The Wild Trout Gallery
Adjusting Journal Entry:
Dec. 31:
Debit Bad Debts Expense $87,595
Credit Allowance for Doubtful Accounts $87,595
To record bad debts expense for the year and bring the Allowance for Doubtful Accounts to a credit balance of $42,600.
Explanation:
a) Data and Analysis:
Jan. 19: Accounts receivable (Arlene Gurley) $1,935 Allowance for Doubtful Accounts $1,935
Apr. 3: Allowance for Doubtful Accounts $11,090 Accounts receivable (Premier GS Co.) $11,090
July 16: Cash $4,975 Allowance for Doubtful Accounts $14,925 Accounts receivable (Hayden Co.) $19,900
Nov. 23: Accounts receivable (Harry Carr) $3,155 Allowance for Doubtful Accounts $3,155
Dec. 31: Allowance for Doubtful Accounts $18,980 Accounts receivable $18,980 (Cavey Co.,$8,340; Fogle Co., $2,475; Lake Furniture, $6,365; Melinda Shryer, $1,800)
Dec. 31: Bad Debts Expense $87,595 Allowance for Doubtful Accounts $87,595
Allowance for Doubtful Accounts
Accounts Title Debit Credit
Accounts receivable (Arlene Gurley) $1,935
Accounts receivable
(Premier GS Co.) $11,090
Accounts receivable
(Hayden Co.) $14,925
Accounts receivable (Harry Carr) $3,155
Accounts receivable $18,980
Bad Debts $82,505
Balance c/d $42,600
You overhear your coworker say that only the balance sheet and income statement are needed to evaluate a firm's financial health. Do you agree with this assessment? Why, or why no
Answer:
I do not agree.
Explanation:
The financial health of a company involves more elements than the balance sheet and the statement of results.
For the success or failure of a company to be truly evaluated, it is necessary that in addition to the factors shown above, it is necessary to analyze: the company's profitability in relation to its fixed and variable costs, the level of indebtedness, the balance point between demand and supply and gross and net profit.
_____ is the process for reviewing key roles and determining the readiness levels of potential internal and external candidates to fill these roles.
a.
Performance management
b.
War for talent
c.
Succession planning
d.
Talent review calibration process
e.
Talent acquisition
Tri-State Mill uses a special sander to finish lumber. Data on the sander and its usage follow. Cost Driver Rate Cost Driver Volume Resources used Energy $ 0.90 per machine-hour 6,000 machine-hours Repairs $ 16.00 per job 600 jobs Resources supplied Energy $ 6,900 Repairs 12,000 Required: Compute unused resource capacity in energy and repairs for Tri-State Mill.
Answer and Explanation:
The computation of the unused resource capacity in energy and repairs for Tri-State Mill. is shown below;
For energy
= $6,900 - 6,000 × $0.90
= $6,900 - $5,400
= $1,500
For repairs
= $12,000 - 600 × $16
= $12,000 - $9,600
= $2,400
Hence, the unused resource capacity in energy and repairs for Tri-State Mill. is $1,500 and $2,400 respectively
Suppose that you could either prepare your own tax return in 12 hours or hire a tax specialist to prepare it for you in 3 hours. You value your time at $25.00 an hour; the tax specialist will charge you $60 an hour. The opportunity cost of preparing your own tax return is
Answer:
$300
Explanation:
Opportunity cost also known as Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
By choosing to do my tax, i am forging the value of my time which is $25 per hour.
If i do my returns i would be spending 12. total value of time = 25 x12 = 300
the amount i would pay the specialist is my explicit cost
you start out with $2,000 in a savings account and save $100 a month for 10 years and the account has a 2.5% interest rate. based on that calculation how much interest would you earn?
Answer: 25%
Explanation:
The marketing decision and research problem should be defined clearly so that a. communication between the researcher and the decision maker can be reduced. b. research can be designed properly. c. the researcher knows what results to come up with. d. the decision maker understands the decision to be made. e. all of the above.
Answer:
b. research can be designed properly.
Explanation:
Market research can be defined as a strategic technique which typically involves the process of identifying, acquiring and analyzing informations about a business. It involves the use of product test, surveys, questionnaire, focus groups, interviews, etc.
Secondary market research can be defined as a method designed to determine the demographics of a particular target market.
The marketing decision and research problem should be defined clearly so that the research can be designed properly. Some of the factors to be considered in the design of a market research are;
I. Corporate culture.
II. The environment of the decision maker.
III. The decision maker's objectives.
As a project engineer, you received the AW analysis below from the finance department. It is for a new piece of equipment you ordered some months ago. You were told the interest rate used was 10% per year, but no first cost or projected salvage value was provided and you want to know them. Determine the values of P and S using the AW values for the year 3. Note: The AW values are equivalent values through the given year, not costs for the single year.
Answer and Explanation:
The computation of the value of P and the value of S is shown below:
For P
The Annual worth of the first cost for the year 3 is $18,899
Now
Annual worth = First Cost(A/P, 10%, 3)
$18,899 = P[0.1(1 + 0.1)^3 ÷ ((1 + 0.1)^3 - 1)]
$18,899 = 0.4021P
P = $46,999
For S
The Annual worth of the salvage value for the year 3 is $6,648
Now
Annual worth = Salvage value(A/F, 10%, 3)
$6,648 = S[0.1 ÷ ((1 + 0.1)^3 – 1)]
$6,648 = 0.30211S
S = $22,005
How to control quality?
Answer:
Explanation:
1. Set your quality standards.
In some industries, you may have to meet quality standards set by an outside body, such as an industry association, the local health and safety inspector, or a government regulatory agency. In others, there aren't any official quality standards, so you'll need to set your own.
Each department of your business will have different quality control standards. However, they must all be objectively measurable. For example, if you're developing quality control standards for your customer service team, “sounding friendly on the phone" is not a measurable standard. Measurable standards might include:
Answering all customer calls by the second ring
Responding to all customer service emails within four hours
Resolving customer service problems in five minutes or less
2. Decide which quality standards to focus on.
Of course, you want to ensure quality in all aspects of your operation. However, begin by focusing on the most important measures — those that have the biggest effect on your profits and your customer experience. This will enable you to get results quickly and also keeps you and your team from becoming overwhelmed.
For instance, if you own a restaurant, keeping the restrooms clean is definitely something to monitor in your quality control program—but not the most important thing. Getting orders out to customers quickly and accurately is a more important standard because it has a more direct effect on the quality of experience and customer satisfaction.
3. Create operational processes to deliver quality.
W. Edwards Deming, the founder of modern quality control, believed that well-designed processes lead to high-quality products and services. If you create good processes, continually measure the results of the processes, and work to consistently improve the process, your product or service will get better and better.
Starting with your critical operations, create step-by-step processes that include benchmarks. For instance, in a B2B company's accounting department, operational processes might require preparing and delivering invoices within 24 hours after a job is completed or a product is delivered. In a restaurant, operational processes might require servers to pick up food for delivery to the customer’s table within two minutes of it being prepared.
4. Review your results.
Most business software, from financial and accounting apps to customer relationship management or customer service tools, lets you customize the information you collect and use dashboards to view it at a glance. Review your data regularly to see how well your company is meeting its quality standards.
5. Get feedback.
Use measurable feedback from external sources, such as customer surveys, online ratings and reviews and net promoter scores (NPS), to get a fuller picture of product and service quality. Also, get regular feedback from employees. How well are the operational processes working to deliver quality? How could they be improved?
6. Make improvements.
Once you’re meeting your quality control standards, don't stop there. For example, if you own a residential cleaning service business and you can cut the time it takes your maids to clean a home by 25 percent, you’ll be able to handle 25 percent more business without hiring any additional employees. That will really boost your bottom line.
No matter how well your processes are running, quality control shows there's always room for improvement, and making small changes can pay off in big ways.