Answer:
Annual benefit from college education (Increase in earnings) = $50,000 - $20,000 = $30,000
Assuming 4 years of college study period
The net present value of a college education if the interest rate is 10% is as follows:
Net present value = PV of benefits - PV of costs
Net present value = Annual benefit*P/A(10%,4) - Annual costs of attending college*P/A(10%,4)
Net present value = 30,000 * P/A(10%,4) - 20,000 * P/A(10%,4)
Net present value = (30,000 - 20,000) * P/A(10%,4)
Net present value = 10,000 * P/A(10%,4)
Net present value = 10,000 * 3.1699
Net present value = $31,699
How does this change if the interest rate is 15%?
Net present value = 30,000 * P/A(15%,4) - 20,000 * P/A(15%,4)
Net present value = (30,000 - 20,000) * P/A(15%,4)
Net present value = 10,000 * 2.855
Net present value = $28,550
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Windsor, the owner of Windsor's Sandwiches, contacts Gary, a new supplier. He promises Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning. Gary promises to make the delivery as requested by Windsor. What type of contract is formed and why?
Answer: bilateral contract
Explanation:
Based on the information given in the question, the type of contract formed is a bilateral contact.
A bilateral contract refers to a contract whereby both parties that are involved make promises to perform a certain action. The promise of some party will be the consideration on which the promise of the other party will be based.
Since Windsor promises Gary that he will pay him $375 if Gary delivers 20 pounds of cheese the following morning and Gary promises to make the delivery as requested by Windsor, then this is a bilateral contract.
Pluto Inc., a leather goods manufacturer, produces and sells a wide range of leather bags, wallets, purses, and belts. It recently opened an outlet in Mexico. However, since Mexico's per capita income is approximately one-third that of the U.S., Lolita's sales have dipped. Moreover, the extent of available financing in the country is limited. With regard to global marketing research, the dip in Lolita's sales can be attributed to which of the following organizational issues?
A. Political conditions
B. Culture
C. Willingness to buy
D. Ability to buy
The Bay Fig Corporation has $350,000 of taxable income from operations for the current year, and dividends of $50,000 received from 10-percent-owned domestic corporations. How much is the Bay Fig Corporation's dividends received deduction for the current year
Answer: $25,000
Explanation:
When a company owns less than 20% of another company and receives dividends from that company, they are allowed to deduct 50% of that dividend for tax purposes.
Bay Fig owns 10%(less than 20%) of the domestic corporations so qualifies for the 50% reduction:
= Dividends * 50%
= 50,000 * 50%
= $25,000
ayton Inc. reports in its Year 7 annual report, sales of $7,362 million and cost of goods sold of $2,945 million. For next year, you project that sales will grow by 3% and that cost of goods sold percentage will be 1 percentage point higher. Projected cost of goods sold for Year 8 will be:
Answer: $2,974.45 million
Explanation:
Cost of goods sold for Year 7 = $2,945 million
Cost of goods sold is expected to increase by 1%.
Cost of goods sold in Year 8 will be:
= 2,945 * (1 + 1%)
= $2,974.45 million
Palepu Company owns and operates a delivery van that originally cost $38,080. Straight-line depreciation on the van has been recorded for three years, with a $2,800 expected salvage value at the end of its estimated six-year useful life. Depreciation was last recorded at the end of the third year, at which time Palepu disposes of this van.
a. Compute the net book value of the van on the disposal date.
b. Compute the gain or loss on sale of the van if the disposal proceeds are:
1. A cash amount equal to the van's net book value.
a. $13,000 cash.
b. $10,000 cash
Answer and Explanation:
The computation is shown below;
But before that the depreciation expense per year is
Depreciation per year = (Cost - Residual value) ÷ Useful life
= ($38,080 - $2,800) ÷ 6 years
= $5,880
1.Net book value as on disposal date is
= $38,080 - ($5,880 × 3)
= $20,440
2.
We know that
Gain on sales = (Sales - Book value)
Gain = $(20,400 - 20,400) = 0
a. Loss = $13,000 - $20,440 = -$7,440
b. Loss = $10,000 - $20,440 = -$10,440
Jobs Inc. has recently started the manufacturer of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 21, 300 Tri-Robos is as follows.
Cost
Direct materials $1,086,300
Direct labor ($39 per robot) 830,700
Variable overhead ($5 per robot) 106,500
Allocated fixed overhead ($28 per robot) 600,000
Total $2,623,500
Jobs is approached by Tiench Inc, which offers to make Tri-Robo for $113 per unit of $2,406,900.
Following are independent.
Assume that $405,000 of the fixed overhead cost can be avoided. Enter negative amount.
Make Buy Net Income Increase (Decrease)
Direct materials $ $ $
Direct labor
Variable overhead
Fixed overhead
Purchased price
Totals $ $ $
Using incremental analysis, determine whether Jobs should accept this offer.
The offer _____
Assume that none of the fixed can be avoided. However, if the robots are purchased from Tienh Inc, Jobs can use the released productive resources to generate additional income f $375,000 Enter negative amount.
Make Buy Net Income Increase (Decrease)
Direct materials $ $ $
Direct labor
Variable overhead
Fixed overhead
Opportunity cost
Purchased price
Totals $ $ $
Based on the above assumptions, indicate whether the offer should be accepted or rejected?
The offer _____
Answer:
Jobs Inc.
1. The offer should not be accepted.
2. The offer should be accepted.
Explanation:
a) Data and Calculations:
Units of Tri-Robos to be manufactured = 21,300
Costs of manufacturing:
Direct materials $1,086,300
Direct labor ($39 per robot) 830,700
Variable overhead ($5 per robot) 106,500
Allocated fixed overhead ($28 per robot) 600,000
Total $2,623,500
Unit cost = $123.17 ($2,623,500/21,300)
Price from Tiench Inc per unit = $113
Total offer price = $2,406,900 ($113 * 21,300)
Make Buy Net Income Increase (Decrease)
Direct materials $1,086,300 $ $
Direct labor 830,700
Variable overhead 106,500
Fixed overhead 195,000
Purchased price 2,406,900
Totals $2,218,500 $2,406,900 $188,400 Decrease
Make Buy
Direct materials $1,086,300
Direct labor ($39 per robot) 830,700
Variable overhead ($5 per robot) 106,500
Allocated fixed overhead ($28 per robot) 600,000
Total $2,623,500 $2,406,900
Opportunity cost 375,000
Total $2,998,500 $2,406,900 $591,600
When a monopolist increases the amount of output that it produces and sells, the price of its output Group of answer choices stays the same. increases. decreases. may increase or decrease depending on the price elasticity of demand.
Answer:
Decreases
Explanation:
Monopolist is the sole seller of a good or service in a market. Eg : Indian Railways
It has a downward sloping demand curve, implying price & quantity demanded are inversely related. So, more quantity can be sold at lower prices, & higher price leads to less quantity sold.
Hence : When a monopolist increases the amount of output that it produces and sells, the price of its output Decreases.
Blue Corporation purchased a truck at the beginning of 2020 for $61,000. The truck is estimated to have a salvage value of $2,440 and a useful life of 195,200 miles. It was driven 28,060 miles in 2020 and 37,820 miles in 2021. Compute depreciation expense using the units-of-production method for 2020 and 2021.
Depreciation expense for 2020
Depreciation expense for 2021
Answer:
Depreciation expense for 2020 = $8,418
Depreciation expense for 2021 = $11,346
Explanation:
Depreciation expense using the units-of-production method is determined as follows :
Depreciation expense = Depreciation rate x annual usage
where,
Depreciation rate = (Cost - Salvage Value) ÷ Estimated usage
= ($61,000 - $2,440) ÷ 195,200 miles
= $0.30 per mile
thus,
Depreciation expense for 2020
Depreciation expense = $0.30 per mile x 28,060 miles
= $8,418
Depreciation expense for 2021
Depreciation expense = $0.30 per mile x 37,820 miles
= $11,346
1. You are evaluating the purchase of HypeToys, Inc. common stock that just paid an annual dividend of $1.80. You expect the dividend to grow at a rate of 12% per year, indefinitely. You estimate that a required rate of return 17.5% will be adequate compensation for this investment. Assuming that your analysis is correct, and the company pays dividends once a year, what is the most that you’re willing to pay for the common stock if you were to purchase it today? Round to the nearest $.01.
Answer:
$36.65
Explanation:
D1 = D*(1+g)
D1 = 1.8*(1+0.12)
D1 = 1.8(1.12)
D1 = $2.016
Price of stock P = D1 / (re - g)
Price of stock P = $2.016 / (0.175 - 0.12)
Price of stock P = $2.016 / 0.055
Price of stock P = $36.654545
Price of stock P = $36.65
So, $36.65 is the most that i will be willing to pay for the common stock if i am to purchase it today.
Hardy Company must maintain a compensating balance of $50,000 in its checking account as one of the conditions of its short-term 6% bank loan of $500,000. Hardy's checking account earns 2% interest. Ordinarily, Hardy would maintain a $20,000 balance in the account for transaction purposes. What is the loan's approximate effective interest rate
Answer:
The loan's approximate effective interest rate is 6.17%.
Explanation:
Interest expense = Short term bank loan * Short term bank loan interest rate = $500,000 * 6% = $30,000
Interest income = Balance in the account checking account * Interest rate on checking account balance = $20,000 * 2% = $400
Net interest expense = Interest expense - Interest income = $30,000 - $400 = $29,600
Available amount = Short term bank loan interest rate - Balance in the account checking account = $500,000 - $20,000 = $480,000
Effective interest rate = Net interest expense / Available amount = $29,600 / $480,000 = 0.0617, or 6.17%
Therefore, the loan's approximate effective interest rate is 6.17%.
Marvin is trying to figure out his cash flow. What is the BEST advice for Marvin to accurately determine his cash flow? OA. Add your liabilities to your assets. OB. Subtract your liabilities from your assets. OC. Add your expenditures to your income. OD. Subtract your expenditures from your income.
Answer:
D
Explanation:
Cash flow is the flow of cash and cash equivalent in and and out of a business.
there are three types of cash flows:
Investing cash flowoperating cash flow financing cash flowCash flow = income - expenditure
If cash flow is being generated from net income, non cash expenditures e.g. depreciation is added back
Answer: Subtract your expenditures from your income.
Which of the following is true of scrum?
A) It was developed to overcome the problems that occur when using the Business Process Modeling Notation (BPMN).
B) It does not adapt to change easily.
C) It is generic enough to be used for the development of business processes, information systems, and applications.
D) Its work periods are usually three months or longer.
E) Answers B and D are correct.
Statement that explains scrum as regards this question is:A: It was developed to overcome the problems that occur when using the Business Process Modeling Notation (BPMN).
Scrum can be regarded as a framework which helps teams to work together. It can be considered as an agile project management framework, and it is developed so that the problems that is associated with Business Process Modeling Notation can be overcomed.Therefore, option A is correct.
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Consumer surplus is Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a positive in the case of a monopolist practicing perfect price discrimination. b zero for a single-price monopolist. c equal to the price minus the marginal cost. d less in the case of a single-price monopoly than in the case of a perfectly competitive industry.
Answer:
d less in the case of a single-price monopoly than in the case of a perfectly competitive industry.
Explanation:
A monopoly is a market structure which is typically characterized by a single-seller who sells a unique product in the market by dominance. This ultimately implies that, it is a market structure wherein the seller has no competitor because he is solely responsible for the sale of unique products without close substitutes. Any individual that deals with the sales of unique products in a monopolistic market is generally referred to as a monopolist.
For example, a public power company is an example of a monopoly because they serve as the only source of power utility provider to the general public in a society.
In a perfect competition, there are many buyers and sellers of homogeneous products, and there is free entry and exit in the market.
This simply means that, in a perfectly competitive market, there are many buyers and sellers (price takers) of homogeneous products (standardized products with substitute) and the market is free (practically open) to all individuals or business entities that are willing to trade all their goods and services.
Generally, a perfectly competitive market is characterized by the following features;
1. Perfect information.
2. No barriers, it is typically free.
3. Equilibrium price and quantity.
4. Many buyers and sellers.
5. Homogeneous products.
Examples of a perfectly competitive market are the Agricultural sector, e-commerce and the foreign exchange market.
Generally, consumer surplus is less in the case of a single-price monopoly than in the case of a perfectly competitive industry.
Legos makes multiple lines of products, including Duplos (for toddlers), various Lego kits and games (for boys 7-12 years of age), Friends and Disney Princess Lego kits (for girls 7-12 years of age), Technics (automated kits for teenage boys), and Legos Architecture (for young adults and college students). For each of these product lines, Lego targets a specific segment of consumers and develops different promotional strategies to appeal to each segment. This illustrates:
Question Completion:
O an undifferentiated targeting strategy.
O a differentiated (multi-segment) targeting strategy.
O a concentrated targeting strategy.
O none of these.
O an non-concentrated targeting strategy.
Answer:
Legos
This illustrates:
O a differentiated (multi-segment) targeting strategy.
Explanation:
The company is using a differentiated, multi-segment targeting strategy. The multi-segments targeted are toddlers, boys 7-12 years of age, girls 7-12 years of age, teenage boys, and young adults and college students. With this differentiated multi-segment marketing, Legos targets each segment in a different way, providing unique benefits to the different market segments. The purpose is to maximize sales and profits by meeting the multivariate needs of the various segments.
Rick Co. had 35 million shares of $1 par common stock outstanding at January 1, 2021. In October 2021, Rick Co.'s Board of Directors declared and distributed a 1% common stock dividend when the market value of its common stock was $69 per share. In recording this transaction, Rick would:
Answer:
None of the choices are correct
Explanation:
We use the par value of stock to determine the dividend instead of the market value of stock.
Dividend Calculation :
Dividend = 35,000,000 shares x $1 x 1%
= $350,000
Journal :
Debit : Dividend $350,000
Credit : Cash $350,000
he bylaws of the corporation: A. are adopted as one of the first items of business at the organizational meeting held promptly after incorporation. B. may contain any provision for managing the business not inconsistent with law or the charter. C. may be repealed by the board of directors. D. All of these are true.
Answer:
D. All of these are true.
Explanation:
A corporation can be defined as a corporate organization that has facilities and owns or controls assets used for the production of goods and services in at least one country other than its headquarter (home office) located in its home country.
This ultimately implies that, a corporation is a corporate organization that owns or controls its business in two or more countries.
It is considered to be one of the most complicated and expensive type of organization. Generally, a corporation is considered to be perpetual in nature and it is a body that comprises of a group of people such as directors, shareholders etc., who act as a single entity. Also, it can be sold through stocks or shares, as a public entity.
One of the advantage of a corporation is that, owners have limited liability for debt to the extent to which they have invested and as such are not personally liable for some of debt owed by corporation.
A bylaw can be defined as rules or laws that are binding on an organization and its employees, as a result generally governs the internal affairs of the organization.
Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $760,000 and with an expected useful life of four years and no residual value. Assume that, for tax purposes, the deduction is 40%, 30%, 20%, and 10% in those years. Pretax accounting income the first year the equipment was used was $860,000, which includes interest revenue of $24,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 25%.
Required:
Prepare the journal entry to record income taxes.
Answer:
Dr Income Tax Expense $209,000
Cr Income Tax Payable $180,500
Cr Deferred Tax Liability $28,500
Explanation:
Preparation of the journal entry to record income taxes
First step is to determine the Current tax liability and Deferred tax liability
Current year Future year
Pre Tax Accounting Income $860,000 $0
Permanent differences
Municipal bond Interest ($24,000) $0
Temporary differences
Depreciation expense ($114,000) $114,000
[($760,000*40%)-($760,000/4)]
Taxable income $722,000 $114,000
Enacted tax rate 25% 25%
Current tax liability $180,500
($772,000*25%)
Deferred tax liability $28,500
($114,000*25%)
Now let Prepare the journal entry
Dr Income Tax Expense $209,000
($180,500+$28,500)
Cr Income Tax Payable $180,500
Cr Deferred Tax Liability $28,500
(Being income tax and deferred tax recorded for first year)
Price rises from $10 to $11, and the quantity demanded falls from 100 units to 95 units. What is the price elasticity of demand using the midpoint formula between these two prices in absolute terms (round to 2 decimal places)
Answer:
0.54
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = midpoint change in quantity demanded / midpoint change in price
Midpoint change in quantity demanded = change in quantity demanded / average of both demands
change in quantity demanded = 100 - 95 = 5
average of both demands = (100 + 95) / 2 = 97.5
Midpoint change in quantity demanded = 5 / 97.5 = 0.051282
midpoint change in price = change in price / average of both price
change in price = $11 - $10 = 1
average of both price = ($11 + $10) / 2 = 10.5
midpoint change in price = 1 / 10.5 = 0.095238
Price elasticity of demand = 0.051282 / 0.095238 = 0.54
If the required direct materials purchases are 15000 pounds, the direct materials required for production is three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct materials in pounds?
Answer: 22500
Explanation:
The the desired ending direct materials in pounds will be calculated thus:
purchased (p) = 15000
Required will be = 3 × purchased = 3p
Beginning direct material = 3.5p
Therefore, the desired ending direct material will be:
= 3.5p + p - 3p
= 1.5p
= 1.5 × 15000
= 22500
Greg, a landscaper, is planning on opening his own landscaping company. He currently earns $50,000 per year working for his uncle but he will need to quit that job. He hires one employee at an annual wage of $15,000. He needs to pay rent of $8,000 per year. He plans to use $12,000 in savings to pay for the equipment he needs, the market value of the equipment at the end of the year is $10,000. Also he needs to buy $3,000 of goods and services from other firms. The current interest rate on savings is 7 percent. Greg predicts that the revenue from the new landscaping company is $80,000 a year. What is total opportunity cost incurred by Greg in running his own business
Answer: $52,840
Explanation:
The opportunity cost are the benefits he will give up to pursue his current venture of landscaping.
= Salary from working for uncle + Interest on the Savings to be used in business + Difference in market value if he waits till the end of the year
= 50,000 + (7% * 12,000) + (12,000 - 10,000)
= $52,840
The total opportunity cost incurred by Greg in running his own business is $52,840.
It should be noted that opportunity cost simply means the real cost of a foregone alternative. Opportunity cost arises as a result of scarcity of resources.
Therefore, the total opportunity cost incurred by Greg in running his own business will be:
= Salary from working for uncle + Interest on the Savings to be used in business + Difference in market value if he waits till the end of the year
= 50,000 + (7% × 12,000) + (12,000 - 10,000)
= 50000 + 840 + 2000
= $52,840
In conclusion, the opportunity cost is $52840.
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Rubin Enterprises had the following sales-related transactions on a recent day:
a. Billed customer $27,500 on account for services already provided.
b. Collected $5,875 in cash for services to be provided in the future.
c. The customer complained about aspects of the services provided in Transaction a. To maintain a good relationship with this customer, Rubin granted an allowance of $1,500 off the list price. The customer had not yet paid for the services.
d. Rubin provided the services for the customer in Transaction b. Additionally, Rubin granted an allowance of $350 because the services were provided after the promised date. Because the customer had already paid, Rubin paid the $350 allowance in cash.
Required:
Prepare the necessary journal entry (or entries) for each of these transactions.
Answer:
Transaction a
Debit : Account Receivable $27,500
Credit : Sales Revenue $27,500
Transaction b
Debit : Cash $5,875
Credit : Deferred Revenue $5,875
Transaction c
Debit : Sales Revenue $1,500
Credit : Account Receivable $1,500
Transaction d
Debit : Deferred Revenue $5,875
Credit : Sales Revenue $5,525
Credit : Discount received $350
Explanation:
The journals have been prepared above.
What happens if you only make the minimum payment on your credit card statement? |
Answer:
then your credit does not go into default
Explanation:
tell me if im right please if im not sorry
Sutherland manufactures and sells 50,000 laser printers each month. A principal component part in each printer is its paper feed drive. Sutherland's plant currently has the monthly capacity to produce 80,000 drives. The unit costs of manufacturing these drives (up to 80,000 per month) are as follows. Variable costs per unit: Direct materials $ 23 Direct labor 15 Variable manufacturing overhead 2 Fixed costs per month: Fixed manufacturing overhead $ 1,300,000 Desk-Mate Printers has offered to buy 10,000 paper feed drives from Sutherland to be used in its own printers. a. Compute the average unit cost of manufacturing each paper feed drive assuming that Sutherland manufactures only enough drives for its own laser printers. b. Compute the incremental unit cost of producing an additional paper feed drive. c. Compute the per-unit sales price that Sutherland should charge Desk-Mate to earn $140,000 in monthly pretax profit on the sale of drives to Desk-Mate.
Answer:
Sutherland
a. The average unit cost of manufacturing each paper feed drive is:
= $56.25.
b. The incremental unit cost of producing an additional paper feed drive is:
= $170.
c. The per-unit sales price that Sutherland should charge Desk-Mate to earn $140,000 in monthly pre-tax profit on the sale of drives to Desk-Mate is:
= $184.
Explanation:
a) Data and Calculations:
Production and sales of laser printers per month = 50,000
Monthly production capacity for paper feed drives = 80,000
Unit costs of producing drives:
Variable costs per unit:
Direct materials $ 23
Direct labor 15
Variable manufacturing overhead 2
Variable cost per unit $40 $3,200,000 (80,000 * $40)
Fixed costs per month:
Fixed manufacturing overhead $1,300,000
Total production costs = $4,500,000
Average unit cost = $56.25 ($4,500,000/80,000)
Incremental unit cost of producing an additional paper feed drive:
Variable cost = $40 * 10,000 = $400,000
Additional fixed cost per month = $1,300,000
Total incremental costs = $1,700,000
Unit cost = $170 ($1,700,000/10,000)
Total incremental costs = $1,700,000
Monthly pre-tax target profit 140,000
Expected sales revenue = $1,840,000
Sales price per drive = $184 ($1,840,000/10,000)
Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $5,600, $10,600, and $16,800 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a rate of return of 10 percent is applicable to this potential purchase. What is Marko willing to pay today to buy ABC Co.
Answer:
$26,473.33
Explanation:
The amount Marko would be willing to pay today can be determined by calculating the present value of the cash flows
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = $5,600
Cash flow in year 2 = $10,600
Cash flow in year 3 = $16,800
I = 10%
PV = $26,473.33
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Ahrends Corporation makes 70,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 17.80 Direct labor 19.00 Variable manufacturing overhead 1.00 Fixed manufacturing overhead 17.10 Unit product cost $ 54.90 An outside supplier has offered to sell the company all of these parts it needs for $48.50 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $273,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $8.20 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products. What is the financial advantage (disadvantage) of purchasing the part rather than making it
Answer:
$147,000
Explanation:
The computation of the financial advantage (disadvantage) of purchasing the part rather than making it is shown below;
Particulars Make Buy
Direct material $1,246,000 (70,000 × $17.80)
Direct labour $1,330,000 (70,000 × $17.80)
Variable manufacturing
overhead $70,000 (70,000 × $1)
Fixed manufacturing
overhead $623,000 (70,000 × ($17.10 - $8.20))
Purchase cost $3,395,000 (70,000 × $48.50)
Opportunity cost $273,000
Total cost $3,542,000 $3,395,000
So, the Advantage is
= ($3,542,000 - $3,395,000)
= $147,000
The financial advantage that Ahrends Corporation will get by purchasing the part rather than making it is $147,000.
Data and Calculations:
Number of units produced per year = 70,000
Direct materials $ 17.80
Direct labor 19.00
Variable manufacturing overhead 1.00
Total variable costs = $37.80
Fixed manufacturing overhead 17.10
Unit product cost $ 54.90
Outside supplier's price = $48.50
Total avoidable costs:
Direct materials $ 17.80
Direct labor 19.00
Variable manufacturing overhead 1.00
Fixed manufacturing cost = 8.90
Total avoidable costs = $46.70
Make Buy Differential Analysis
Variable costs $3,269,000 $3,395,000 ($126,000)
Additional contribution (273,000) 273,000
Total costs/savings $3,269,000 $3,122,000 $147,000
Thus, Ahrends Corporation will gain $147,000 by purchasing the part rather than making its in-house.
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A hospitality company is evaluating building a new hotel in Bloomington (capital project) that management forecasts will generate $45,000 each year over its six (6) year life. If the required rate of return given the project's identified risks is 12% (percent), and the project's up front costs are estimated at $165,000, should management go forward with the project?
a. Management should approve the new hotel since the project's NPV is positive.
b. Management should reject the new hotel project as the project's NPV is negative.
c. Unable to determine given information.
Answer:
A
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-165,000
Cash flow in year 1 - 6 = $45,000
I = 12%
NPV = $20,013.33
the project should be approved because NPV is positive
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
1 My sister.....coming home this weekend. (is / are).
2 My sisters......coming home this weekend. (is / are).
3 I....going to Disneyland in March (am / are).
4 We....going to Disneyland in March. (am / are) .
5 He always.....his toys with me(share e/shares).
6 They always.....their toys with me.(share/ shares).
7 My class.....a lot of homework today. (has/have).
8 We.......a lot of homework today.(has/have).
9 You ......nice in that dress. (look looks).
10 She..... nice in that dress. (look looks).
Answer:
1. is
2. are
3. am
4. shares
5. share
6. has
7. has
8. have
9. look
10. looks
Explanation:
pay attention In class
Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships.
Required:
1. The likelihood of a payment occurring is probable, and the estimated amount is $1.11 million.
2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.91 to $1.11 million.
3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.11 million.
4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.11 million.
Record the necessary entry for the scenarios given above. (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, (i.e. 5.5 should be entered as 5,500,000).)
Answer: See explanation
Explanation:
The necessary journal entry with regards to the scenarios given above will be:
1. Debit Loss $1,110,000
Credit Contingent liability $1,110,00
2. Debit Loss $910,000
Credit Contingent Liability $910,000
3. No journal entry
4. No journal entry
Note that there won't be a journal entry for (3) and (4) since the likelihood of a payment occurring is reasonably possible, and remote.
Item7
Item
Skipped
Item 7
Internet users aged 15 and older are expected to buy about ________ worth of products and services online in 2022 (excluding travel, automobile, and prescription drugs).
Multiple Choice
$200 million
$900 million
$40 billion
$100 billion
$500 billion
Answer:
$500 billion
Explanation: