Clean Duds Laundromat has an Industrial water softener that enhances the water quality used in its washing machines. The water softener is approaching the end of its useful life and must be either overhauled or replaced. Details of the two alternatives are shown below. If the company overhauls Its current water softener, then it will be usable for eight more years. If, Instead, a new water softener is purchased, it will be used for eight years, after which it will be replaced. The new water softener will be considerably more energy efficient, resulting in a substantial reduction in annual operating costs, as shown below: Purchase cost new Remaining book value Overhaul needed now Annual cash operating costs Current water Softener $13,000 $ 9,500 $ 6,500 $ 8,500 New Water Softener $17,500 $ 6,000
Q: A cash budget, by quarters, is given below for a retall company (000 omitted). The company requires…
A: Cash Budget - A cash Budget is a schedule of cash receipts and cash payments to be estimated to be…
Q: When Crossett Corporation was organized in January, Year 1, it immediately issued 4,400 shares of…
A: The cumulative preference shareholders have the right to receive the dividend in arrears before any…
Q: Sims Company began operations on January 1. Its cost and sales information for this year follow. $…
A: Hi! Thank you for the question As per the honor code, We’ll answer the first question since the…
Q: Eaton Enterprises uses the wage-bracket method to determine federal income tax withholding on its…
A: The wages paid to employees are subject to withholding taxes. There exist two methods to determine…
Q: Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for…
A: Fair value accounting refers to the practice of measuring your business's liabilities and assets at…
Q: nalyze Apple Inc. by segment Segment disclosure by Apple Inc. (AAPL) provides sales information for…
A: horizontal analysis is used to represents changes over a periods horizontally while, vertical…
Q: Bandar Industries manufactures sporting equipment. One of the company's products is a football…
A: Materials spending variance = (Actual quantity*Actual price)-(Standard quantity*Standard price)…
Q: At January 1, 2022, Sheridan, Inc. has beginning inventory of 4800 widgets. Sheridan estimates it…
A: Sales revenue is the amount of revenue that an entity earned by selling goods or providing services…
Q: Larkspur Brothers Inc. purchased land and an old building with the intention of removing the old…
A: Net revenue, also known as net sales or net income, is the amount of revenue generated by a company…
Q: for the current year: Direct materials (2 kg of plastic at $5 per kilogram) $10.00 Direct labour (2…
A: Material price variance: Actual cost of material purchased = $31,200 Actual quantity of material…
Q: Susan has a credit card with an APR of 7.2%. For the billing period ending on June 5, average daily…
A: To calculate the monthly finance charge for Susan's credit card, we need to know the average daily…
Q: Of the following temporary differences, which one ordinarily creates a deferred tax asset? O…
A: A deferred tax asset arises when a company has paid taxes in advance or paid more taxes than…
Q: EXERCISE NO. 1 The following direct materials and direct labour data are for the operations of…
A: Answer:- Variance:- Variance is basically the difference between the standard cost and the actual…
Q: Cullumber's Soft Lemonade is starting to develop a new product for which the cash fixed costs are…
A: The Cash Flow DOL (Degree of Operating Leverage) is a measure of the sensitivity of a company's…
Q: You consider purchasing a new piece of equipment (7yr MACRS property) for your manufacturing process…
A: MACRS stands for modified accelerated cost recovery system, this system is used in the US that…
Q: On 3/1/21, Lansing Company sold 6.5% bonds having a maturity value of $800,000 at a price which…
A: A bond issue requires multiple stages to be accounted for. An outline of the procedure is given…
Q: Assets Current assets Cash Accounts receivable Total current assets Fixed Assets Property, plant &…
A: Current assets are those which will be converted in cash or will be consumed by the entity within a…
Q: After the pandemic conditions subsided, economic activity and transportation began to improve. Anton…
A: a. Monthly cash flow calculation: Average Income per day = IDR 325,000 Total Income per month = IDR…
Q: Prepare a statement of cash f indirect mehed, and compade free Excel P13.7A (LO 2, 3), AN The…
A: Cash Flow Statement :— It is one of the financial statement that shows change in cash and cash…
Q: Instructions: Answer the following questions. a. At what amount should XYZ record the equipment on…
A: The following steps are commonly involved in equipment accounting: Establish the equipment's cost,…
Q: By reference to the data in part A: 1. Return on investment (ROI), residual income (RI), and…
A: Return on investment (ROI), residual income (RI), and economic-value added (EVA) are all performance…
Q: alvatore will contribute $640 to a mutual fund at the beginning of each calendar quarter. What will…
A: Value of mutual fund increases over the period of time due to increase in the prices of stocks over…
Q: The Converting Department of Toren Company had 760 units in work in process at the beginning of the…
A: FIFO METHOD :— Under this method, equivalent units is calculated by adding equivalent units in…
Q: The following data were obtained from the books of JOYFUL CORPORATION: Accounts receivable, March…
A: The gross profit is calculated as the difference between sales and the cost of goods sold. The…
Q: Pharoah Limited exchanged equipment that it uses in its manufacturing operations for similar…
A: A journal entry must contain at least two line items, but there is no limit…
Q: Kendall County entered into a lease agreement to finance computer equipment used in government…
A: Particulars Debit Credit 1 Lease receivable $2,068,563 Lease revenue $2,068,563…
Q: Honesto imported a harvester from the U.S. with a total cost of 1,100,000 before Customs Duties. The…
A: Value Added Tax (VAT) is a tax that is assessed in the Philippines on both the sale of goods and…
Q: Tauros Company’s usual sales terms are net 60 days, FOB Shipping point. Sales, net of returns and…
A: Net sales are calculated by deducting the returns or allowance from the total sales.
Q: Prepare a cash budget for the first quarter.
A: Cash budget is a statement prepared by accountants to estimate cash revenue and cash expense .It is…
Q: If a check correctly written and paid by the bank for $638 is incorrectly recorded on the company's…
A: Lets understand the basics. Bank reconciliation is a statement drawn up by the business to verify…
Q: Tucker Inc. makes dog treats. The material to be purchased from the production budget is as follows:…
A: Lets understand the basics. Management prepares budget in order to estimate future profit and loss…
Q: Chow-4-Hounds (C4H) makes pet food for sale in supermarkets. C4H produces two general types: Branded…
A: INTRODUCTION:- This is a cost and revenue analysis problem for Chow-4-Hounds (C4H), a pet food…
Q: Comparing Profitability Ratios for Competitors Selected income statement data for Abbott…
A: In order to determine the profit margin, the net income is required to be divided by the sales…
Q: Which of the following intangible assets are amortized? (1) Limited-Life (2) Indefinite- Life (1) No…
A: Intangible assets are those assets which do not have physical form and which we cannot touch.
Q: Research the case against Bernie Madoff who was convicted in 2009 for running the largest Ponzi…
A: Bernie Madoff, a former stockbroker and investment adviser, was convicted in 2009 for running a…
Q: Assume Joseph sells all of the receivables over 91 days to Ace Factoring. Approximately how much of…
A: Given in the question: The question is regarding the factoring of the accounts receivables, the…
Q: Direct materials Direct labor I Variable manufacturing overhead Fixed manufacturing overhead…
A: calculation of net operating income under variable costing system and reconciliation between…
Q: Rr.2. eppa, an environmental management firm issued to Dara, a $12,000 8% five year installment…
A: Notes are issued discount rate and that discount rate will depend on interest rate prevailing in the…
Q: he following income statement was drawn from the records of Walton Company, a merchandising firm:…
A: A contribution margin income statement in which all variable expenses are deducted from the sales…
Q: Problem 9-21 (Algo) Multiple Products, Materials, and Processes [LO9-4, LO9-5] Mickley Corporation…
A: A standard cost card contains an itemization of the standard amounts of materials, labor, and…
Q: Liang Company began operations in Year 1. During its first two years, the company completed a number…
A: The journal entries are prepared to record the transactions on regular basis. The allowance for…
Q: Required information [The following information applies to the questions displayed below.] Morganton…
A: Budgeted Sales - Budgeted Sales is an estimated sales prepared by the organization on the basis of…
Q: Question 9 Comparative balance sheets of Belch Ltd for 2022 and 2021 are as follows. Belch Ltd…
A: Cash Flow Statement - Statement of Cash Flow is a financial statement. This statement includes…
Q: Teddy Inc. uses a job costing system. During the month of May, Teddy spent most of its time on job…
A: Overhead allocation: An allocation base,such as direct labor hours,direct labor hours,or machine…
Q: Question list Question 13 O Question 14 Question 15 Question 16 Data table Date Mar 1 Mar 2 Mar 7…
A: Income Statement is that which shown the profit which earned from any business by the purchasing…
Q: 2. Assume that A10 and C70 are both no longer used in any of the company's normal products. What is…
A: Introduction Relevant costs are the costs that are for a decision-making process. Relevant costing…
Q: Issued check 290 to Hospital Texaco for gas purchased for delivery trucks in the amount $389.95.…
A: Specialized journals in accounting are books of original entry used to record specific types of…
Q: Visit www.sec.gov/edgar and search for the Tesla annual report (10-K) for the year ended December…
A: Estimating and recording the anticipated expenses connected with offering warranty services to…
Q: Shadee Corporation expects to sell 580 sun shades in May and 390 in June. Each shade sells for $147.…
A: Budgeting is the process of estimating future values by using past performance. which helps the…
Q: 9. On July 1, 2022 Trump Co. purchased a patent for a pump that details a novel system to drain…
A: Amortization is an accounting method for spreading out the costs for the use of a long-term asset…
Hh.33.
Step by step
Solved in 3 steps with 2 images
- Clean Duds Laundromat has an industrial water softener that enhances the water quality used in its washing machines. The water softener is approaching the end of its useful life and must be either overhauled or replaced. Details of the two alternatives are shown below. If the company overhauls its current water softener, then it will be usable for eight more years. If, instead, a new water softener is purchased, it will be used for eight years, after which it will be replaced. The new water softener will be considerably more energy efficient, resulting in a substantial reduction in annual operating costs, as shown below: Purchase cost new Remaining book value Overhaul needed now Annual cash operating costs Salvage value now Salvage value eight years from now New Water Softener Current Water Softener $17,000 $13,500 $ 8,500 $10,500 $ 3,800 $ 23,500 $ 7,200 $ 1,900 $ 4,800 Clean Duds computes depreciation on a straight-line basis. All equipment purchases are evaluated using a 14%…Georgia Ceramic Company has an automatic glaze sprayer that has been used for the past 10 years. The sprayer can be used for another 10 years and will have a zero salvage value at that time. The annual operating and maintenance costs for the sprayer amount to $15,000 per year. Due to an increase in business, a new sprayer must be purchased, either in addition to or as a replacement for the old sprayer. Option 1: H the old sprayer is retained, a new, smaller capacity sprayer willbe purchased at a cost of $48,000; this new sprayer will have a $5.000 salvage value in I 0 years and annual operating and maintenance costs of $12.000. The old sprayer has a current market value of $6.000.Option 2: If the old sprayer is sold, a new sprayer of larger capacity will bepurchased for $84,000. This sprayer will have a $9,000 salvage value in 10years and annual operating and maintenance costs of $24,000.Which option should be selected at MARR = 12%?Georgia Ceramic Company has an automatic glaze sprayer that has been used for the past 10 years. The sprayer can be used for another 10 years and will have a zero salvage value at that time. The annual operating and maintenance costs for the sprayer amount to $15,000 per year. Due to an increase in business, a new sprayer must be purchased, either in addition to or as a replacement for the old sprayer.• Option 1: If the old sprayer is retained, a new, smaller capacity sprayer will be purchased at a cost of $48,000; this new sprayer will have a $5.000 salvage value in 10 years and annual operating and maintenance costs of $12,000. The old sprayer has a current market value of $6.000.• Option 2: If the old sprayer is sold, a new sprayer of larger capacity will be purchased for $84,000. This sprayer will have a $9,000 salvage value in 10 years and annual operating and maintenance costs of $24,000.Which option should be selected at MARR = 12%?
- An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $30,000 the first year, but process improvements will allow the costs alternative, an outside company will process the wastes for the fixed price of $15,000/year throughout the 15 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 15 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 12%. decline by $3,000 each year. As an Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The AW of the in-house treatment is S (Round to the nearest dollar) The AW of the outside treatment is S (Round to the nearest dollar.) The processing is the most economical alternativeThe Georgia Ceramic Company has anautomatic glaze sprayer that has been used for thepast 10 years. The sprayer can be used for another10 years and will have a zero salvage value at thattime. The annual operating and maintenance costsfor the sprayer amount to $15,000 per year. Due toan increase in business, a new sprayer must be purchased. Georgia Ceramic is faced with two options.• Option 1: If the old sprayer is retained, a newsmaller capacity sprayer will be purchased at a costof $48,000, and it will have a $5,000 salvage valuein 10 years. This new sprayer will have annualoperating and maintenance costs of $12,000. Theold sprayer has a current market value of $6,000.• Option 2: If the old sprayer is sold, a newsprayer of larger capacity will be purchased for$84,000. This sprayer will have a $9,000 salvagevalue in 10 years and will have annual operatingand maintenance costs of $24,000.Which option should be selected at MARR = 15%?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.
- An ice plant bought a freon compressor. The estimated life of the compressor is 15 years. An investigation reveals that the new compressors are very much improved during that time. However, this compressor is still in good condition. It can be sold for an estimated price of $1,200 or it can be kept and operated for 2 more years. A new compressor of the same capacity may be purchased to replace it at a cost completely installed for $18,000. If the old machine operates at $1,200 per year and the new machine at $600 per year, and the salvage value is 10% of first cost, what is the rate of return on additional investment and should it be replaced?Kingsville plans to buy a street-cleaning machine. A used cleaning vehicle will cost $80,000 and have a $10,000 salvage value at the end of its five year life. A new system with advanced features will cost $160,000 and have a $45,000 salvage value at the end of its five year life. The new system is expected to reduce labor hours compared with the used system. Current street cleaning activity requires the used system to operate 8 hours per day for 20 days per month. Labor costs $50 per hour and MARR is 12% per year. Find the breakeven labor hours for the new system. USE SOLVER FUNCTION IN EXCELA packaging factory is considering the replacement of some equipment. The new plan is to install equipment to produce a new can that uses less energy and less metal than the old one. Current equipment was installed 5 years ago for $100 million and can be sold for $35 million. Due to obsolescence the depreciation of this equipment results in an annual depreciation of $4 million for the next years. If you keep this equipment for one more year your operating and maintenance costs will be $65 million increasing by $3 million/year each year thereafter. The new equipment will cost $130 million, with an economic life of 8 years and a salvage value of $10 million. Its operating and maintenance costs will be $49 million. For a TMAR = 15% p.a. what new equipment should be installed? Make a recommendation about it. (Answer: The solution would be to use the current equipment for another two years and then exchange it for new equipment.
- A certain factory building has an old lightingsystem. Lighting the building currently costs, on average, $20,000 a year. A lighting consultant tells thefactory supervisor that the lighting bill can be reducedto $8,000 a year if $50,000 is invested in new lightingin the building. If the new lighting system is installed,an incremental maintenance cost of $3,000 per yearmust be taken into account. The new lighting systemhas zero salvage value at the end of its life. If the oldlighting system also has zero salvage value, and thenew lighting system is estimated to have a life of 20years, what is the net annual benefit for this investment in new lighting? Take the MARR to be 12%.Assume the old lighting system will last 20 years.6.43 Your company needs a machine for the nextseven years, and you have two choices (assume anannual interest rate of 15%).• Machine A costs $100,000 and has an annual operating cost of $47,000. Machine A has a useful lifeof seven years and a salvage value of…Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $18,600 per year and will have variable costs of $1,700 per year. Fixed costs are $950. The system will cost $50,400 to purchase and install. This system is expected to have a 5-year life and will be depreciated to zero using straight-line depreciation and have no salvage value. The tax rate is 21 percent. Please provide a pro forma financial statement to Cash Flows from Operations for the life of the pressure cooker. PLEASE ANSWER THIS QUESTION IN EXCEL FORMULA, NOT ALGEBRAICALLY!Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhauled or replaced with a new truck. The company has assembled the following information: Purchase cost new Remaining book value Overhaul needed now Annual cash operating costs Salvage value-now Salvage value-five years from now If the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years. If a new truck is purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel-operated, resulting in a substantial reduction in annual operating costs, as shown above. The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 7% discount rate. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Present Truck $ 31,000 $ 24,000 $ 23,000 $…