Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below.Alternative X Alternative Y$ 52,000Materials costsProcessing costs$ 75,800$ 57,100$ 57,100Equipment rental$ 21,200$ 21,200Occupancy costs$ 20,400$ 30,000What is the financial advantage (disadvantage) of Alternative Y over Alternative X?Multiple ChoiceOOO$(33,400)$(167,400)$184,100$150,700

Answer Formula For calculation of financial advantage / ( disadvantage) alternative Y over…

Answered: Two alternatives, code-named X and Y,…

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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(Ignore income taxes in this problem.) Your Company has a telephone system that is in poor condition. The system must be either overhauled or replaced with a new system. The following data have been gathered concerning these two alternatives: Present System Proposed New System Purchase cost when new $100,000 $110,000 Accumulated depreciation, 90,000 Overhaul cost needed now 80,000 Working capital required 50,000 Annual cash operating costs 30,000 20,000 Salvage value now of old system 10,000 Salvage value in 8 years 2,000 15,000 Your Company uses a 12% discount rate and the total cost approach to capital budgeting analysis. Both alternatives are expected to have a useful life of eight years. What is the net present value of the new system alternative? Enter your answer without dollar signs. If the NPV is negative enter with a minus sign in front.
Morton and Moore LLC (M²) is trying to decide between two machines that are necessary in its manufacturing facility. If M² has a MARR of 10%, which of the following machines should be chosen? Hint: Minimize EUAC. Machine A Machine B 6- 28 620 First cost $45,000 $24,000 Annual operating costs 31,000 35,000 Overhaul in Years 2 and 4 6,000 Overhaul in Year 5 12,000 Salvage value 10,000 8,000 Useful life 8 years 6 years 1 Ne Ac Ca Ca EM Ye Co Pr Ri Vi Ge Lit Ra Ne An Pr Sa Sc Be
A stereo company supplier car radios to auto manufacturers and is going to open a new plant. The company is undecided between Serendah and Seremban as the site. The fixed costs for Serendah are lower due to cheaper land costs, but the variable costs are higher because shipping distances would increase. Given the following costs: i. ii. iii. Cost Fixed Variable Serendah RM600,000 RM28/radio Seremban RM800,000 RM22/radio Graph the total-cost lines for all the sites. Over what range of volume is each location the preferable one? For a volume of 20,000 units, which site is the best?
A study has been conducted to determine if Product A should be dropped. Sales of the product total $500,000; variable expenses total $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice ($10,000) $10,000 ($50,000) $50,000 Next
sheffield corp has several outdated computers that cost a total of 19400 and could be sold as scrap for 6000. they could be updated for additonal 2500 and sold. if sheffield updates the computers and sells them net income will increase by 9000. what amount would be considered sunk costs a)2500 b)21900 c)9000 d)19400
A firm that manufactures paper is considering a project to set up a logging operation. Wood pulp generated by the project - normally an unwanted by-product of a logging operation - is an input to the paper manufacturing process. This will save the company $340,000 in wood pulp purchases, but it will cost $50,000 more to transport the wood pulp to the paper factory than it would cost to dump it as waste. How would you describe this situation in terms of the NPV analysis for the logging operation? Question 2Answer a. There is a positive externality equal to $290,000 which should be included in the NPV analysis. b. There is a positive externality equal to $340,000 which should be included in the NPV analysis. c. There is a negative externality equal to $290,000 which should be included in the NPV analysis. d. There is a negative externality equal to $340,000 which should be included in the NPV analysis.
None
A manufacturer of automated optical inspection devices is deciding on a project to increase the productivity of the manufacturing processes. The estimated costs for the two feasible alternatives being compared are shown below. Use the internal rate of return (IRR) method to determine which alternative should be selected if the analysis period is 8 years and the company's MARR is 4% per year. Alternative M N Initial costs $30,000 $45,000 Net annual cash flow $4,500 $7,000 Life in years 8 8 (a) IRR of base alternative = (b) IRR of incremental cash flow = (c) Choose Alternative
Two alternatives, identified X and Y, are under consideration at Hayden Corporation. Costs associated with the alternatives are listed below. What is the total differential costs of Alternative Y over Alternative X? a) $123,000 b) $140,000 c) $34,000 d) $106,000
Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below. Materials costs Processing costs Equipment rental Occupancy costs Alternative X $45,000 $49, 400 $18, 400 $17, 600 Multiple Choice What is the financial advantage (disadvantage) of Alternative Y over Alternative X? Show Transcribed Text $(144,800) $130,400 Alternative Y $65, 300 $49, 400 $18, 400 $26, 100 $159,200 $(28,800) G
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