Net present value : Net present value is the difference between the present values of cash inflows minus present value of cash outflows. Calculate the cost of retained earnings are as follows: Net present value = Present value of cash inflows − Initial investment Decision rule: NPV > 0 Accept the project NPV < 0 Reject the project OOG is considering to replace an asset with new one which has cost of $153,800 and old machine has book value of $8,000. Asset is classified under five years MACRS class and can be sold after five years for 10,800. Savings from the machine is increases from $70,000 to $110,000. Life of the project is 5 years, tax rate is 40% and required rate of return is 12%.

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Brightwoodę Furniture provides the following financial data for a given enod: Sales Aount ($) Per Unit ($) 150,000 13 Less Variable E - L96,000 13 Contribwaon Margin c 1C Less Fixed Expenses $5,000 et Income 125,000 a. What is the company's CM ratio? b. If quarterly sales increase by $5,200 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?

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Chapter 10, Problem 14PROB

Summary Introduction

Net present value:

Net present value is the difference between the present values of cash inflows minus present value of cash outflows.

Calculate the cost of retained earnings are as follows:

Net present value=Present value of cash inflows−Initial investment

Decision rule:

NPV>0 Accept the projectNPV<0 Reject the project

OOG is considering to replace an asset with new one which has cost of $153,800 and old machine has book value of $8,000. Asset is classified under five years MACRS class and can be sold after five years for 10,800. Savings from the machine is increases from $70,000 to $110,000. Life of the project is 5 years, tax rate is 40% and required rate of return is 12%.

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Brightwoodę Furniture provides the following financial data for a given enod: Sales Aount ($) Per Unit ($) 150,000 13 Less Variable E - L96,000 13 Contribwaon Margin c 1C Less Fixed Expenses $5,000 et Income 125,000 a. What is the company's CM ratio? b. If quarterly sales increase by $5,200 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?

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Footfall Manufacturing Ltd. reports information at the end of the current year: Net Sales $100,000 Debtor's turnover ratio (based on 2 net sales) Inventory turnover ratio 1.25 Fixed assets turnover ratio 0.8 Debt to assets ratio 0.6 Net profit margin 5% Gross profit margin 25% Return on investment 2% the following financial Use the given information to fill out the templates for income statement and balance sheet given below: Income Statement of Footfall Manufacturing Ltd. for the year ending December 31, 20XX (in $) Sales 100,000 Cost of goods sold Gross profit Other expenses Earnings before Lax Tax @50% Earnings tax after