Sew Perfect specialises in clothing alterations and repairs. With a slogan of 'You ask, we sew', they pride themselves in the fact that they deliver quick, quality work, and that no request is too big or too small for them. They have built up quite a strong reputation in the community where they are located, and are looking to expand their reach to customers outside of the traditional borders of their business. As part of their expansion plan, they are looking to replace some of their outdated sewing machines with state-of-the-art, heavy-duty, industrial Swiss sewing machines. The new machinery costs R75 000 and a Swiss representative must install the machines at Sew Perfect's factory shop at a cost of R3 200. Sew Perfect can sell their old machines for a total of R20 000, but must deliver them to the buyer at a cost of R380. Sew Perfect originally bought the machines 6 years ago for a total of R38 000, and depreciated it on a straight-line basis over a period of 10 years. The firm is subject to a 28% tax rate. The capital expenditure results in an increase in net working capital of R18 000.

Q: How can engineers make capital-expenditure choices that are based on forecasting success?

A: As a result of this forecasting performance, engineers make capital-expenditure decisions will be…

Q: What exactly does the phrase "working capital" mean? The components of working capital are listed…

A: Solution:- "working capital" mean as follows:- working capital is the difference between current…

Q: What are the different factors affecting the requirements of working capital? Enumerate.

A: Working Capital- It is the fund that is required by a company for managing its day -to-day working…

Q: Should the economic engineers make capital-expenditure decisions based on a prediction about the…

A: The question is based on the concept of capital expenditure decision making, which is investment of…

Q: What is the cost of capital rate in the question?

A: Cost of capital is the WACC of the project. WACC is equal to weighted average cost of capital. WACC…

Q: Distinguish between the company cost of capital and project cost of capital?

A: Answer: Differences between project cost of capital and company’s cost of capital: Project cost of…

Q: What are the ramifications of having Working Capital?

A: The Ramifications Of Having Working Capital Will Be Explained:

Q: what is the benetifs of the accountants involvement in the capital investment decision?

A: In capital investment decision it is advisable to involve accountant. Following are the benefits for…

Q: How do we get the weighted average cost of capital if not given in the question?

A:

Q: What is meant by working capital? What is significance of working capital management?

A: Working capital is the amount which the company would require to fund its day to day operations. It…

Q: You are looking at a project analysis, which yields a net present value of $ 18,829. The project…

A: Working capital involves for the amount of cash put for maintain short-term assets as they are…

Q: What are some of the factors that inform the cost of capital?

A: The cost of capital represents the return expected by providers of capital (both debt and equity) to…

Q: How does the Paid-in capital consist primarily of?

A: Share capital of the company means all funds raised by the company in exchange of shares.  Shares…

Q: Define the term Paid-in capital?

A: Stockholders’ equity: Stockholders’ equity is referred to as the claims of the stockholders on the…

Q: Is cost of capital set by investors or managers?

A: Cos of capital (Coc) is rate of return required to make capital budgeting decisions for example,…

Q: Relate the idea of cost of capital to the opportunity cost concept. Is the cost of capital the…

A: The total cost of financing current projects (or projects under consideration) will be the financial…

Q: Why should the capital expenditures be capitalized?

A: Capital Expenditures:   Capital expenditures are those which provide future economic benefits by…

Q: What is the weighted average cost of capital?

A: The formula to compute weighted average cost of capital as follows:

Q: how to find paid in capital

A: It is an equity account on a company's balance sheet. .It represents the amount of money received…

Q: How did the term working capital originate?

A: Introduction: Working capital can be defined as the necessary financial resources needed by a firm…

Q: When should the investment in working capital be treated as capital expenditure?

A: Working capital:   It is the form of capital used by the business for day-to-day operations. Working…

Q: orking capital?What are types of worki

A: Working capital or net working capital is total current assets less total current liabilities as…

Q: discuss the advantages and disadvantages of using return on capital employed ?

A: We have to find the advantages and disadvantages of using return on capital employed (ROCE).

Q: What are the various costs that must be evaluated in a capital budgetingdecision?

A: Capital budgeting is the process of planning to make a decision to invest in long period investments…

Q: How can the Cash flow be considered to evaluate the economic meritof any investment project?

A: Investment projects are usually capital expenditure that includes different cash flows. Capital…

Q: What exactly does the phrase "working capital" mean? The components of working capital are listed…

A: Here is the Answer

Q: What is working capital?

A: Working capital is the difference between current assets and current liabilities. It is a measure of…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.