14. A short-term project requires 10,000 hours of unskilled labour and5,000 hours of skilled labour. Both are currently fully utilised.The unskilled workers are paid £10 per hour and would work up to15,000 more hours of overtime at an overtime rate of £15 per hour.Alternatively, additional labour could be recruited at £18 per hour.The skilled workers are paid £30 per hour. They will not workovertime, and no suitable new workers can be recruited. Sufficienthours could be obtained by transferring them from other work whichhas a contribution of £10 per hour (after accounting for labour costs).What is the relevant cost of labour for the proposed project?(a) £425,000(b) £350,000(c) £275,000(d) £200,000

concept. For decision making , only relevant cost are useful. Irrelevant cost and sunk cost are not…

Answered: 14. A short-term project requires…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Aa4
7. Canary Ltd. owns a yacht that is in need of repair and which was purchased for £6,800. The company is working to full capacity but is considering refurbishing the yacht for resale. Workers who are paid £20 per hour will carry out the refurbishment and it is estimated that 200 hours work is required. The normal labour charge for customers is £20 per hour. The company believes that the yacht could be sold for £6,200 in its current condition. Materials costing £1,000 would be required to carry out the refurbishment. Calculate the minimum resale price that the business would have to charge to justify the refurbishment of the yacht: A. £15,200 В. £11,200 С. £10,200 D. £6,200
A rotational molding operation has fixed costs of $10,000 per year and variable costs of $52 per unit. If the process is automated via conveyor, its fixed cost will be $43,000 per year, but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even. The number of units each year necessary for the two operations to break even, (in units) Round to the nearest two (2) decimal places
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Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be $4.93 million per year. Your upfront setup costs to be ready to produce the part would be $7.95 million. Your discount rate for this contract is 7.9%. a. What does the NPV rule say you should do? b. If you take the contract, what will be the change in the value of your firm? a. What does the NPV rule say you should do? The NPV of the project is $ million. (Round to two decimal places.)
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