A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000. The firm's current fixed costs are $9,000 and current marginal costs are $15. The firm currently charges $18 per unit. If the interest rate is 5% then the present value of the cash flows is O a. $6,020.41 O b. $51,020.41 O c.-$7,380.95 O d. $10,000

A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000. The firm's current fixed costs are $9,000 and current marginal costs are $15. The firm currently charges $18 per unit. If the interest rate is 5% then the present value of the cash flows is O a. $6,020.41 O b. $51,020.41 O c.-$7,380.95 O d. $10,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Refer to Table below. Mr. AI-Maashani owns high end wedding cake baking business in Salalah. He leases/rents 4 high tech computer-controlled cake baking machines, for which he pays RO125 per day. He cannot increase the number of machines he leases/rents. He can hire as many workers as he wants at a cost of RO75 per day per worker. These are the only two inputs (cake baking machines and labour) he uses in his cake baking business. Use this information to fill in the columns in the above table. Number of workers Number of cakes per day Fixed cost Variable cost Total cost Average total cost Marginal cost 0 0 1 10 2 25 3 45 4 60 5 70
The payback period with interest is the length of time required to recover the first cost of an investment from the cash flow produced by the investment for a given interest rate i Select one: O True False
H1. Mimi's is developing a Fiery Habanero muffin, which will NOT compete with anything Mimi's currently offers. Unit contribution margin for the new Fiery Habanero muffin would be $3.38. Contribution margin for the company's Banana Nut muffin is $3.25 per unit. Mimi's expects to sell 45,000 units of the new muffin, if it is introduced. Compute weighted contribution margin for the new muffin. (Rounding: penny.)
A manufacturing company leases a building for $90,000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid in installments of $21,000 per year. Each unit of product produced costs $16 in labour and $9 in materials. The product can be sold for $34. How many units must be sold each year for the company to earn a profit of $56,000 per year? Select one: O A. 16,701 B. 19,086 C. 9,543 D. 11,929 E. 7,157
What is the calculation to get 187,641?
665 Capital (K) 0 10 Labor (L) O $13.30 O $1.95 O $10.19 O $6.34 317 Please refer to the graph above. Assume that cost is $4,216. What is the capital rental rate? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.
7 8 Part 3: Economic Ordering Quantity 9 1. Calculate the company's EOQ for Engine Valve A1100 (make sure to link values to the other tabs): 10 11 Estimated Annual Sales this year: 12 Ordering cost for each order: 13 Carrying Cost per unit 14 15 EOQ: 16 units units 17 2. Complete the table below by linking to the appropriate cells in the other tabs: 18 19 Order Size Total Total Carrying Cost Ordering Cost 24 20 21 28 29 30 22222222223 25 26 5 10 20 50 100 27 3. Create a graph of both the Carrying and Ordering cost. Make sure your EOQ ties to where the two lines cross. Rename your Chart to: Cost of Ordering & Carrying Inventory L
During a year of operation, a firm collects $50,000 in sales revenue and spends $10,000 on salaries of workers, $1,520 on electricity and utilities, $6,000 on raw materials. The firm owner had to leave his job which was paying $30,000 of annual salary. The firm owner also used $5,000 of his personal savings, which was earning a guaranteed 5 percent annual rate of return. calculate The firm earns accounting profit, The firm's economic profit.
5. Rearden Metals is considering opening a strip mining operation to provide some of the raw materials needed in producing Rearden metal. The initial purchase of the land and the as- sociated costs of opening up mining operations will cost $100 million today. The mine is expected to generate $30 million worth of ore per year for the next 10 years. In 11 years, when the project is over, Rearden will need to spend $200 million to restore the land to its original pristine natural appearance. Which of the following is FALSE? A) Rearden should only use the NPV rule in this case to determine whether to make this investment. B) Rearden could use either the NPV rule or the IRR rule in this case, and will get the same answer regardless of the cost of capital. C) In this case, the NPV will not necessarily be decreasing in the cost of capital or discount rate used. D) Rearden should not use the payback rule in this example because it is likely to be mis- leading. E) Rearden could make a mistake…
A welder will deposit P500.00with a savings and loan association at the beginning of each 4 months for 10 years. If the association pays interest at the rate of 7% every 4 months, find the sum of his credit just after the last deposit. O a. P22,877.00 O b. P21,787.00 O c. P21,788.00 O d. P21,877.00
Suppose that the price of a barrel of oil is $80 and interest rates remain at 8%. If a new technology is implemented in one of the wells and it costs $3,000,000. Calculated the estimated "profit" from outfitting one of our wells with this new technology.
An individual leaves a college faculty, where she was earning $70,000 a year, to begin a new venture. She invests her savings of $42,000, which were earning 7 percent annually. She then spends $25,000 renting office equipment, hires two students at $18,000 a year each, rents office space for $14,000, and has other variable expenses of $35,000. At the end of the year, her revenues are $250,000. Her accounting profit is $