Calculate the net present value. Net present value $
Q: Cullumber Inc. sells tickets for a Caribbean cruise on ShipAway Cruise Lines to Bonita Company…
A: Commission refers to a form of compensation or payment that an individual or entity receives for…
Q: Required: Prepare a production budget by month and in total, for the second quarter.
A: Down Under Products, Limited,Production BudgetAprilMayJuneQuarterBudgeted Unit…
Q: Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children…
A: Solution:-The said question asks to complete specific calculations about Charlotte's tax situation…
Q: The stock of Quail Corporation is held as follows: 80% by Pheasant Corporation and 20% by Gisela, an…
A: Upon complete liquidation, a corporation calculates gain or loss by comparing the fair market value…
Q: Lucia Company has set the following standard cost per unit for direct materials and direct labor.…
A: The variance analysis refers to the comparison of the standard sets with the actual results for the…
Q: Calculate the missing amounts. a b d e Net sales Cost of goods sold Gross profit from sales…
A: An income statement is a financial report that summarizes a company's revenues and expenses over a…
Q: Manji
A: The objective of the question is to calculate the amount of goods available for sale, ending…
Q: Carla Vista Company has a unit selling price of $384, unit variable costs of $254, and fixed costs…
A: Break even point :— It is the point of production where total cost is equal to total revenue. At…
Q: ete Presidio's cost data table. te Presidio's contribution margin ratio and its total contribution…
A: Introduction The cost may be defined as that type of expense which occurs during the process of…
Q: The comparative balance sheets for Carla Vista Corporation appear below: CARLA VISTA CORPORATION…
A: A cash flow statement provides a snapshot of a company's cash inflows and outflows during a specific…
Q: Blanchard Company manufactures a single product that sells for $136 per unit and whose total…
A: Contribution means the difference between the selling price and variable cost. Break even point…
Q: Quality Brick Company produces bricks in two processing departments-Molding and Firing. Information…
A: The unit product cost refers to the cost incurred in the factory for the production of goods and…
Q: On June 10, Ayayai Company purchased $8,900 of merchandise on account from Whispering Winds Company,…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: Clothing Company has two service departments-purchasing and maintenance, and two production…
A: Under step down allocation method one service department (usually with the highest cost) allocates…
Q: Current (no automation) 72,000 units Proposed (automation) 107,000 units Per Per Production and…
A: MARGINAL COSTING INCOME STATEMENTMarginal Costing Income Statement is One of the Important Cost…
Q: ! Required information [The following information applies to the questions displayed below.] A…
A: INVENTORY VALUATIONInventory Valuation is a Method of Calculation of Value of Inventory at the End…
Q: On the first day of its fiscal year, Western Company purchased a new computer system for a total…
A: DEPRECIATION EXPENSEDepreciation means gradual decrease in value of assets due to normal wear and…
Q: Question 18 Omni Co. Manufactures I Phones. The selling price per unit is $240, the variable cost…
A: The objective of the question is to calculate the expected operating income for Omni Co. for the…
Q: Rundle Company manufactures a personal computer designed for use in schools and markets it under its…
A: Contribution to profit from special order = Revenue from special order - Relevant cost of special…
Q: erez Company makes fine jewelry that it sells to department stores throughout the United States.…
A: The variable costs are the costs that change with a change in the level of production. The fixed…
Q: Perpetual inventory using LIFO The following units of a particular item were available for sale…
A: The inventory can be valued using various methods as FIFO, LIFO and average method. Using LIFO, the…
Q: 51 tents purchased in February at a cost of $213 each and 92 tents purchased in March at a cost of…
A: FIFO method is one of the methods of inventory valuation in which it is assumed that old purchases…
Q: In alphabetical order below are current asset items for Roland Company's balance sheet at December…
A: The balance sheet is one of the important financial statement of the business. The balance sheet…
Q: 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 8%,…
A: Present value of lease payments = Annual lease payments * PVAD of 1 at I for n periodsPretax amount…
Q: iCompany uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and…
A: The cash receipts journal deals with all money inflows of a business association. At the end of the…
Q: Madetaylor Inc. manufactures financial calculators. The company is deciding whether to introduce a…
A: Revenue: We consider unit sales and price per unit to find total revenue.Variable Costs: Based on…
Q: e management of Mecca Copy, a photocopying center located on University Avenue, has compiled the…
A: The balance sheet is one of the financial statements of a company, prepared at the end of the…
Q: Beginning inventory $72600 Add: Cost of goods purchased 560000 Cost of goods available for sale…
A: Ratio analysis s helps to analyze the financial statements of the company. The management can make…
Q: Technologies Ltd constructed a conveyor for A&G Warehousers that was completed and ready for use on…
A: A promissory note is an instrument used by company to borrow money which comes along with the…
Q: Required information Use the following information for the Exercises below. (Algo) [The following…
A: The comparative balance sheet is the statement which determines the percentage held by each account…
Q: Corporate income tax)
A: 1] Net taxable income refers to the income that remains after deducting allowable expenses,…
Q: Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 10%…
A: The earnings per share on common stock is the earnings is computed based upon the following…
Q: a. Consolidated net income b(1). Noncontrolling interest's share of the subsidiary's income b(2).…
A: Consolidated net income is the total of the parent company's net income, minus any revenue from…
Q: Great Pasta Company manufactures a single product that goes through two processes-mixing and…
A: The equivalent units are calculated on the basis of the percentage of the work completed completed…
Q: On October 10, the stockholders' equity section of Sherman Systems appears as follows. Common…
A: Stock Holders Equity:Stock holders equity means the total amount available to the stock…
Q: answer in text form please (without image), Note: .Every entry should have narration please
A: Functional Currency: When a corporation conducts its business, the functional currency is the…
Q: parents report taxable income of $600,000 (married filing jointly). Sheryl did not provide more than…
A: Under U.S law, the government gives a deduction to all parents who have dependent children. Kiddie…
Q: Exercise 12-9 (Static) Cash flows from investing activities LO P3 a. Equipment with a book value of…
A: Investing Activities: This section reflects cash transactions involving the purchase and sale of…
Q: Jamie Lee Jackson, age 24, now a busy full-time college student and part-time bakery clerk, has been…
A: Liquid assets are the assets those can be easily converted into cash in a very short period of time.…
Q: On April 1, 2024, Oakland Corporation realizes that one of its main suppliers is having difficulty…
A: The journal entries are prepared to record the transactions on a regular basis. The adjustment…
Q: Generally, the revenue account for a merchandising business is entitled Oa. Gross Sales Ob. Sales…
A: The answer is Gross Sales.The revenue account for a merchandising business is generally entitled…
Q: Muffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth M asked you to…
A: Lets understand the basics.In high low method, total costs are segregated into variable costs and…
Q: An excel spreadsheet must be use to complete the following activity: You work for a small business.…
A: Matching 401(k) contributions are extra payments made by employers to the 401(k) plans of their…
Q: IPSAS 35 'Consolidated financial statements' sets out the reporting requirement(s) as which of the…
A: Answer:- Financial statement meaning:- Formal documents that summarize the financial activity and…
Q: Assets Cash and cash equivalents Inventories Receivables (net) Taxes receivable (net) Due from…
A: Warrenton Library DistrictGovernmental Funds Balance Sheet or Statement of Net PositionAs of…
Q: Using Excel to Account for Pensions PROBLEM Uvo Corporation is a private company with a defined…
A: The objective of the question is to calculate the effect of the pension plan on pension expense and…
Q: Periodic inventory by three methods The units of an item available for sale during the year were as…
A: Periodic Inventory :- periodic inventory system is a mechanism for mesuring cost of goods sold and…
Q: come statements for Franklin Company for Year 3 and Year 4 follow: FRANKLIN COMPANY Income atements…
A: a. Horizontal analysis -Sales (Current Year - Base Year) / Base Year. We will get change between the…
Q: Brenda and Kipp are not related During 2021, Brenda loans Kipp $30,000, which he intends to use to…
A: Loan receivables from Kipp = $30,000For the year 2022:It is estimated that the creditors will…
Q: Now assume that on December 31, 2023, Sheridan enters into the following transactions related to the…
A: Journalizing is one of the important and basic processes in the accounting cycle. Journalizing is…
Step by step
Solved in 3 steps with 2 images
- Mallette Manufacturing, Inc., produces washing machines, dryers, and dishwashers. Because of increasing competition, Mallette is considering investing in an automated manufacturing system. Since competition is most keen for dishwashers, the production process for this line has been selected for initial evaluation. The automated system for the dishwasher line would replace an existing system (purchased one year ago for 6 million). Although the existing system will be fully depreciated in nine years, it is expected to last another 10 years. The automated system would also have a useful life of 10 years. The existing system is capable of producing 100,000 dishwashers per year. Sales and production data using the existing system are provided by the Accounting Department: All cash expenses with the exception of depreciation, which is 6 per unit. The existing equipment is being depreciated using straight-line with no salvage value considered. The automated system will cost 34 million to purchase, plus an estimated 20 million in software and implementation. (Assume that all investment outlays occur at the beginning of the first year.) If the automated equipment is purchased, the old equipment can be sold for 3 million. The automated system will require fewer parts for production and will produce with less waste. Because of this, the direct material cost per unit will be reduced by 25 percent. Automation will also require fewer support activities, and as a consequence, volume-related overhead will be reduced by 4 per unit and direct fixed overhead (other than depreciation) by 17 per unit. Direct labor is reduced by 60 percent. Assume, for simplicity, that the new investment will be depreciated on a pure straight-line basis for tax purposes with no salvage value. Ignore the half-life convention. The firms cost of capital is 12 percent, but management chooses to use 20 percent as the required rate of return for evaluation of investments. The combined federal and state tax rate is 40 percent. Required: 1. Compute the net present value for the old system and the automated system. Which system would the company choose? 2. Repeat the net present value analysis of Requirement 1, using 12 percent as the discount rate. 3. Upon seeing the projected sales for the old system, the marketing manager commented: Sales of 100,000 units per year cannot be maintained in the current competitive environment for more than one year unless we buy the automated system. The automated system will allow us to compete on the basis of quality and lead time. If we keep the old system, our sales will drop by 10,000 units per year. Repeat the net present value analysis, using this new information and a 12 percent discount rate. 4. An industrial engineer for Mallette noticed that salvage value for the automated equipment had not been included in the analysis. He estimated that the equipment could be sold for 4 million at the end of 10 years. He also estimated that the equipment of the old system would have no salvage value at the end of 10 years. Repeat the net present value analysis using this information, the information in Requirement 3, and a 12 percent discount rate. 5. Given the outcomes of the previous four requirements, comment on the importance of providing accurate inputs for assessing investments in automated manufacturing systems.Jonfran Company manufactures three different models of paper shredders including the waste container, which serves as the base. While the shredder heads are different for all three models, the waste container is the same. The number of waste containers that Jonfran will need during the following years is estimated as follows: The equipment used to manufacture the waste container must be replaced because it is broken and cannot be repaired. The new equipment would have a purchase price of 945,000 with terms of 2/10, n/30; the companys policy is to take all purchase discounts. The freight on the equipment would be 11,000, and installation costs would total 22,900. The equipment would be purchased in December 20x4 and placed into service on January 1, 20x5. It would have a five-year economic life and would be treated as three-year property under MACRS. This equipment is expected to have a salvage value of 12,000 at the end of its economic life in 20x9. The new equipment would be more efficient than the old equipment, resulting in a 25 percent reduction in both direct materials and variable overhead. The savings in direct materials would result in an additional one-time decrease in working capital requirements of 2,500, resulting from a reduction in direct material inventories. This working capital reduction would be recognized at the time of equipment acquisition. The old equipment is fully depreciated and is not included in the fixed overhead. The old equipment from the plant can be sold for a salvage amount of 1,500. Rather than replace the equipment, one of Jonfrans production managers has suggested that the waste containers be purchased. One supplier has quoted a price of 27 per container. This price is 8 less than Jonfrans current manufacturing cost, which is as follows: Jonfran uses a plantwide fixed overhead rate in its operations. If the waste containers are purchased outside, the salary and benefits of one supervisor, included in fixed overhead at 45,000, would be eliminated. There would be no other changes in the other cash and noncash items included in fixed overhead except depreciation on the new equipment. Jonfran is subject to a 40 percent tax rate. Management assumes that all cash flows occur at the end of the year and uses a 12 percent after-tax discount rate. Required: 1. Prepare a schedule of cash flows for the make alternative. Calculate the NPV of the make alternative. 2. Prepare a schedule of cash flows for the buy alternative. Calculate the NPV of the buy alternative. 3. Which should Jonfran domake or buy the containers? What qualitative factors should be considered? (CMA adapted)At Stardust Gems, a faux gem and jewelry company, the setting department is a bottleneck. The company is considering hiring an extra worker, whose salary will be $67,000 per year, to ease the problem. Using the extra worker, the company will be able to produce and sell 9,000 more units per year. The selling price per unit is $20. The cost per unit currently is $15.85 as shown: What is the annual financial impact of hiring the extra worker for the bottleneck process?
- Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $240,438. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 2 3 4 5 6 7 No $390,900 399,800 410,100 425,400 434,000 434,900 436,400 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,100. This new equipment would require maintenance costs of $94,000 at the end of the fifth year. The cost of capital is 9%. Click here to view the factor table. Use the net present value method to determine the following: (If net present value is negative then enter with negative sign preceding the number…Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $250,000. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $390,000 2 400,000 3 411,000 4 426,000 5 434,000 6 435,000 7 436,000 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $400,000. This new equipment would require maintenance costs of $100,000 at the end of the fifth year. The cost of capital is 9%Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $240,352. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $390,600 2 400,200 3 410,000 4 425,200 5 432,400 6 435,500 7 436,300 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $380,500. This new equipment would require maintenance costs of $94,900 at the end of the fifth year. The cost of capital is 9%. Use the net present value method to determine the following: (If net present value is negative then enter with negative sign…
- Sunland Inc. manufactures snowsuits. Sunland is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased 5 years ago at a price of $1.8 million; six months ago, Sunland spent $55,000 to keep it operational. The existing sewing machine can be sold today for $244,395. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 2 3 4 5 6 7 $389,500 400,400 410,500 425,400 O 433,000 435,400 436,600 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value expected to be $379,200. This new equipment would require maintenance costs of $98,000 at the end of the fifth year. The cost of capital is 9%. Click here to view PV table. Use the net present value method to determine the following: (If net present value is negative then enter with negative signi preceding the number eg.-45 or…Oriole Inc. manufactures snowsuits. Oriole is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased 5 years ago at a price of $1.8 million; six months ago, Oriole spent $55,000 to keep it operational. The existing sewing machine can be sold today for $211,855. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 2 3 4 5 6 7 $390,600 399,400 411,000 425.900 432,000 434,600 436,400 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,400. This new equipment would require maintenance costs of $94,200 at the end of the fifth year. The cost of capital is 9%. Click here to view PV tableRealforce is considering making a new mechanical keyboard. The company has spent $200,000 in research for a silent mechanical switch, which they can use on the new keyboard. Realforce estimates that they can sell $5,000 units of the new keyboard per year at $250 per unit for the next 4 years. The production cost per keyboard is $200. The fixed costs for the project will run $50,000 per year. To start the production, Realforce has to invest a total of $400,000 in manufacturing equipment, The equipment will be 100 percent depreciated over a straight line basis for the next 4 years and become valueless at the end of the project. The tax rate is 35 percent and the discount rate is 15 percent. a) What is the operating cash flow for this project? b) What is the project's NPV? c) Suppose that the manu facturing equipment will have a market value of $18,000 at the end of the project and the project requires an initial investment in net working capital of $10,000, which is fully recoverable at…
- Difend Cleaners has been considering the purchase of an industrial dry-cleaning machine. The existing machine is operable for three more years and will have a zero disposal price. If the machine is disposed now, it may be sold for $170,000. The new machine will cost $360,000 and an additional cash investment in working capital of $170,000 will be required. The new machine will reduce the average amount of time required to wash clothing and will decrease labor costs. The investment is expected to net $130,000 in additional cash inflows during the first year of acquisition and $290,000 each additional year of use. The new machine has a three-year life, and zero disposal value. These cash flows will generally occur throughout the year and are recognized at the end of each year. Income taxes are not considered in this problem. The working capital investment will not be recovered at the end of the asset's life. What is the net present value of the investment, assuming the required rate of…Beryl's Iced Tea currently rents a bottling machine for $52,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options: a. Purchase the machine it is currently renting for $150,000. This machine will require $23,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $255,000. This machine will require $15,000 per year in ongoing maintenance expenses and will lower bottling costs by $12,000 per year. Also, $35,000 will be spent upfront training the new operators of the machine. Suppose the appropriate discount rate is 8% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the rental of the machine. Assume also that the machines will be depreciated via the straight-line method over seven years and that they have a ten-year life with a negligible salvage value. The corporate tax rate is 20%. Should Beryl's Iced Tea…Beryl's Iced Tea currently rents a bottling machine for $55,000 per year, including all maintenance expenses. It is considering purchasing a machine instead and is comparing two options: a. Purchase the machine it is currently renting for $160,000. This machine will require $23,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $255,000. This machine will require $18,000 per year in ongoing maintenance expenses and will lower bottling costs by $15,000 per year. Also, $39,000 will be spent up front to train the new operators of the machine. Suppose the appropriate discount rate is 7% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the cost of the rental machine. Assume also that the machines will be depreciated via the straight-line method over seven years and that they have a 10-year life with a negligible salvage value. The marginal corporate tax rate is 25%. Should Beryl's Iced…