eBook Show Me How 1000TLUcator=&inprogress=false C Average Rate of Return-New Product Micro Tek Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 6,200 units at $297 per unit. The equipment has a cost of $691,900, residual value of $52,100, and an 8- year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor Direct materials Factory overhead (including depreciation) Total cost per unit Determine the average rate of return on the equipment. If required, round to the nearest whole percent. % $51.00 Print Item 200.00 34.60 $285.60 Q☆☆口 Coming December 9th - 16h Love and Monsters-Watch the tra 00 Dec 8 2:28 X

eBook Show Me How 1000TLUcator=&inprogress=false C Average Rate of Return-New Product Micro Tek Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 6,200 units at $297 per unit. The equipment has a cost of $691,900, residual value of $52,100, and an 8- year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor Direct materials Factory overhead (including depreciation) Total cost per unit Determine the average rate of return on the equipment. If required, round to the nearest whole percent. % $51.00 Print Item 200.00 34.60 $285.60 Q☆☆口 Coming December 9th - 16h Love and Monsters-Watch the tra 00 Dec 8 2:28 X

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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9
Average rate of return-new product Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 7,200 units at $254 per unit. The equipment has a cost of $803,500, residual value of $60,500, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor Direct materials Factory overhead (including depreciation) Total cost per unit $43.00 168.00 28.60 $239.60 Determine the average rate of return on the equipment. If required, round to the nearest whole percent. %
FULL QUESTION: Kinky Copies may buy a high-volume copier. The machine costs $100,000 and this cost can be fully depreciated immediately. Kinky anticipates that the machine actually can be sold in 5 years for $30,000. The machine will save $20,000 a year in labor costs but will require an increase in working capital, mainly paper supplies, of $10,000. The firm’s marginal tax rate is 21%, and the discount rate is 8%. (Assume the net working capital will be recovered at the end of Year 5.) What is the NPV of this project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)
9. A company that sells high-purity laboratory chemicals is considering investing in new equipment that will reduce cardboard costs by better matching the size of the products to be shipped to the size of the shipping container. If the new equipment will cost Php1M to purchase and install, how much must the company save each year for 3 years in order to justify the investment, if the interest rate is 10% per year? A Php66465.26 B Php88465.26 Php302114.80 Php402114.80
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Average rate of return—new product Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 6,600 units at $270 per unit. The equipment has a cost of $675,200, residual value of $50,800, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Line Item Description Amount Cost per unit: Direct labor $45.00 Direct materials 174.00 Factory overhead (including depreciation) 29.55 Total cost per unit $248.55 Determine the average rate of return on the equipment. If required, round to the nearest whole percent.
M1
Correct Answer Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $343,762 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $110,000 per year until it reaches $1,320,000, where it will remain. The required return is 16%. What is the value of the option to wait 2 years to purchases the machine? (Round answer to 2 decimal places. Do not round intermediate calculations) 63,711.41 margin of error +/- 0.02
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eBook Average Rate of Return-Cost Savings Northwest Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $103,000 with a $9,000 residual value and a five-year life. The equipment will replace one employee who has an average wage of $32,680 per year. In addition, the equipment will have operating and energy costs of $9,960 per year. Print Item Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent. % 3 0 D Coming December 9th 16h Love and Monsters - Watch the tra... Dec 8 MONS 2:27