EX 25-3Average rate of return-new productObj. 2 Galactic Inc. is considering an investment in new equipment thatwill be used to manufacture a smartphone. The phone is expected toSHOW ME HOWgenerate additional annual sales of 6,000 units at $250 per unit. Theequipment has a cost of $850,000, residual value of $50,000, and an eight-year life. The equipment can only be used to manufacture the phone. The cost tomanufacture the phone follows:Cost per unit:Direct labor$ 15.00Direct materials134.00Factory overhead (including depreciation)Total cost per unit33.50$182.50Determine the average rate of return on the equipment.Answer

Calculate the operating income of company G.

Answered: EX 25-3 Average rate of return-new…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Page 266 MINICASE Flowton Products enjoys a steady demand for stainless steel infiltrators used in a number of chemical processes. Revenues from the infiltrator division are $50 million a year, and production costs are $47.5 million. However, the 10 high-precision Munster stamping machines that are used in the production process are coming to the end of their useful life. One possibility is simply to replace each existing machine with a new Munster. These machines would cost $800,000 each and would not involve any additional operating costs. The alternative is to buy 10 centrally controlled Skilboro stampers. Skilboros cost $1.25 million each, but compared with the Munster, they would produce a total saving in operator and material costs of $500,000 a year. Moreover, the Skilboro is sturdily built and would last 10 years, compared with an estimated seven-year life for the Munster. Analysts in the infiltrator division have produced the accompanying summary table, which shows the…
Exercise 24-20A (Algo) IRR for investment using Excel LO P4 OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $5.0 million, has a 20-year life, and will have zero salvage value. If the system is implemented, the company will save $780,000 per year in direct labor costs. The company requires a 12% return from its investments. Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to 2 decimal places.) Internal rate of return
Question 10 A Full explain this question and text typing work only thanks
Ch 25 Pro. 2 Please give me step by step instructions to calculate the answer. Average Rate of Return—Cost Savings Master Fab Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $99,000 with a $9,000 residual value and a 10-year life. The equipment will replace one employee who has an average wage of $22,950 per year. In addition, the equipment will have operating and energy costs of $4,770 per year. 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.__________________ % Liz C
10 part 1
ed Problem 6-18 Project NPV Imperial Motors is considering producing its popular Rooster model in China. This will involve an initial investment of CNY 4.8 billion. The plant will start production after one year. It is expected to last for five years and have a salvage value at the end of this period of CNY 508 million in real terms. The plant will produce 200,000 cars a year. The firm anticipates that in the first year, it will be able to sell each car for CNY 73,000, and thereafter the price is expected to increase by 4% a year. Raw materials for each car are forecasted to cost CNY 26,000 in the first year, and these costs are predicted to increase by 3% annually. Total labor costs for the plant are expected to be CNY 1.9 billion in the first year and thereafter will increase by 7% a year. The land on which the plant is built can be rented for five years at a fixed cost of CNY 308 million a year payable at the beginning of each year. Imperial's discount rate for this type of project…
3 #12 Palmer Corporation is considering the purchase of a new plece of equipment. The cost savings from the equipment would result in an annual increase in net operating income of $100,000. The equipment will have an initial cost of $400,000 and a 7-year useful life. If the salvage value of the equipment is estimated to be $75,000, what is the accounting rate of return? Multiple Choice 14.28% 25.00% 4211% 147.37% Q
Exercise 23-10 (Algo) Keep or replace LO P5 Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $49,000 and a remaining useful life of five years. It can be sold now for $59,000. Variable manufacturing costs are $49,000 per year for this old machine, Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Purchase price Variable manufacturing costs per year (a) Compute the income increase or decrease from replacing the old machine with Machine A (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) if the machine should be replaced, which new machine should Lopez purchase? Req A Complete this question by entering your answers in the tabs below. Revenues Machine A: Keep or Replace Analysis Req B Compute the income increase or decrease from replacing the old machine…
2:38 d ces The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,955,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 18%. The project would provide net operating income in each of five years as follows: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed. out-of-pocket costs $750,000 591,000 $ 2,865,000 1,015,000 1,850,000 Depreciation Total fixed expenses Net operating income Click here to view Exhibit 128-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Profitability index 1,341,000 $ 509,000 Foundational 12-5 (Algo) 5. What is the profitability index for this project? (Round your answer to 2 decimal places.)

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