A MAN MANAGEMENT OF AN INDUSTRIAL COMPANY WANTS TO BE SURE ON THEIR DECISION OF BUILDING A NEW PLANT IN TWODIFFERENT ALTERNATIVE LOCATIONS WITH COST PARAMETERS AS FOLLOWS:COST ITEMSLOCATION 1LOCATION 2PLANT COSTP2,250,000.00P100,000.00P2,000,000.00P120,000.00LABOR/YEAROVERHEAD/YEARP55,000.003% OF FIRST COSTP40,000.005% OF FIRST COST20%TAXES AND INSURANCEWORTH OF MONEY20%CAPITAL RECOVERY10 ΥEARS10 YEARSIF THE COST OF RAW MATERIALS IS THE SAME FOR BOTH PLANT, WHICH LOẠCTION IS BETTER, USING ANNUAL WORTHMETHOD? WHY?

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Answered: A MAN MANAGEMENT OF AN INDUSTRIAL…

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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Variable Cost of Manufacturing Component: $15 per unitOutside Purchase Price: $18 per unit Incremental Fixed Cost in Manfucturing : $6,000 Find whether the company should buy or make the component if its annual requirements are (a) 1500 units (b) 3000 units (c) At what level the company would be indifferent between buying and manufacturing?
Denver is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,150 units. The annual cost of these jigs and tools is $35,000. Should Denver acquire these tools? Show your calculations.
A contractor is assembling a bid for a lump-sum building project. The summation of all task costs is $15,000,000. Annual company revenue is $400 million, and annual home office costs are $25 million. Total job office overhead is estimated to be $3 million and desired profit is 11%. Include O&P, what lump-sum price should the contractor bid?
The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A $ Machine B $ 0 40,000.00 50,000.00 1 10,000.00 8,000.00 2 10,000.00 8,000.00 3 10,000.00 + replacement 8,000.00 4 8,000.00 + replacement These costs are expressed in real terms. 1. Suppose you are Borstal’s financial manager. If you had to buy one or the other machine and rent it to the production manager for the machine’s economic life, what annual rental payment would you have to charge? Assume a 6% real discount rate and ignore taxes. 2. Which machines should Borstal buy? 3. Suppose you actually do buy one of the machines and rent it to the production manager. How much would you actually have to charge in each future year if there is steady 8% per year inflation?
Wexford Industrial Supply is considering a new project with estimated depreciation of $27,000 and fixed costs of $32,000. The accounting break-even level of sales is $67,160 and the average variable costs per unit are $4.80. What is the accounting break-even quantity? Multiple Choice 12,292 units 6,667 units 1,700 units 5,625 units 13,992 units Please answer fast i give you upvote.
A manufacturing plant wishes to buy a new equipment so the purchasing department did some research on different types of this equipment. In the monthly meeting, the purchasing department presented a report about the two types of equipment that they have found. Pertinent data are as follows: Турe A Туре В First cost P250,000 P350,000 Annual operating cost 30,000 22,000 Annual labor cost 52,000 34,000 Insurance and property taxes 3% 3% Labor/Payroll taxes 4% 4% Estimated life 10 10 If the minimum required rate of return is 18%, 1. What is the annual worth of Type A? [ Select ] 2. What is the annual worth of Type B? [Select ] 3. Which machine should be selected?[ Select ]
Swifty's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $117000 22000 49000 30000 If Swifty's Manufacturing Company purchases the component externally, $20000 of the fixed costs can be avoided. What is the maximum amount Swifty is willing to pay to purchase the 100 units? $218000 O $188000 $198000 $208000
Question 1: A manufacturing firm wants to choose from amongst three different machines for its plant. A hand operated machine with fixed and variable costs of Rs 2000 and Rs 4 per unit respectively. A semi-automatic machine with fixed and variable cost of Rs. 8000 and Rs. 2 per unit and an automatic machine costing Rs. 20000 and Rs. 1 per unit. If the firm wants to produce 10,000 units then which machine should be selected (also write your comments)
4 You are given the following for the production of office chairs by the company 'Chairs and More": ed Total Fixed Costs (JMD$) 10,000 10,000 Quantity produced out of 100 200 10,000 10,000 10,000 10,000 question 300 400 500 600 Variable cost per unit is $150. The production of 15,000 chairs will cost: Select one: O a. $2,250,000 O b. $1,500,000 O c. $10,000 O d. $2,260,000
Don't use pen or paper Suppose a project will require 2500 local labour hours at the construction stage. Assume it can hire 80 % of labour who would otherwise be unemployed and 20% of labour will be sourced from elsewhere in the economy. The market wage of labour is $45 per hour while the leisure time for unemployed labour is measured at $20 per hour. Match the following values you would use in the CBA: Total labour cost (market price) Total labour cost (shadow price) Total net employment Total opportunity cost of labour A. 112500 B. 50000 C. 40000 D. 62500 E. 62500

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