Provide correct calculation Database Systems is considering expansioninto a new product line. Assets to supportexpansion will cost $740,000. It is estimatedthat Database can generate $1,910,000 inannual sales, with a 4 percent profit margin.What would net income and return on assets(investment) be for the year?

Given:Annual Sales: $1,910,000Profit Margin: 4%Total Assets (Investment): $740,000 Calculate Net…

Answered: Database Systems is considering…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...

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Accounting Problem: Database systems is considering expansion into a new product line. Assets to support expansion will cost $500,000. It is estimated that Database can generate $1,200,000 in annual sales, with a 6 percent profit margin. What would net income and return on assets(investment) be for the year?
Suppose Canadian Tire is considering investing in warehouse-management software that costs $500,000, has $50,000 residual value, and should lead to cost savings of $120,000 per year for its five-year life. In calculating the ARR, which of the following figures should be used as the equation's denominator?
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Answer the following lettered questions on the basis of the information in this table: Amount of R&D, $ Millions Expected Rate of Return on R&D, % $ 10 16 20 14 30 12 40 10 50 8 60 6 Instructions: Enter your answer as a whole number. a. If the interest-rate cost of funds is 8 percent, what is this firm's optimal amount of R&D spending? million %24
What is the margin, turnover and ROI if the existing company performs the same next year AND it adds the proposed investment? Paul company has the following data for its most recent year end: Sales $1,400,000 Variable Expenses $756,000 Contribution Margin $644,000 Fixed Expenses $410,000 NOI $234,000 AIso Paul is considering an investment in new equipment that willcost $250,000. The new equipment is projected to produce saIes of$420,000 and have variabIe costs of 60% of sales and fixed costs of$114,000.
A company is thinking of investing in one of two potential new products for sale. The projections are as follows: Year Revenue/cost £ (Product A) Revenue/cost £ (Product B)0 (150,000) outlay (150,000) outlay 1 24,000 12,0002 24,000 25,3333 44,000 52,0004 84,000 63,333 Calculate NPV of both products (to 1 d.p.) assuming a discount rate of 7%. Which product should be chosen and why?

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Database Systems is considering expansion into a new product line. Assets to support expansion will cost $740,000. It is estimated that Database can generate $1,910,000 in annual sales, with a 4 percent profit margin. What would net income and return on assets (investment) be for the year?