REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)
16th Edition
ISBN: 9780134789705
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 21, Problem 21.38P
Payback methods, even and uneven
Sage estimates the cost of the new equipment at $159,000. The equipment has a useful life of 9 years. Sage expects cash fixed costs of $80,000 per year to operate the new machines, as well as cash variable costs in the amount of 5% of revenues. Sage evaluates investments using a cost of capital of 10%.
- 1. Calculate the payback period and the discounted payback period for this investment, assuming Sage expects to generate $140,000 in incremental revenues every year from the new machines.
Required
- 2. Assume instead that Sage expects the following uneven stream of incremental cash revenues from installing the new washing machines:
Based on this estimated revenue stream, what are the payback and discounted payback periods for the investment?
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Problem No. 3
The business assets of Glea Yares and Eunice Alico appear below:
Yares
Alico
Cash
P
10,000
P
25,000
Accounts Receivable
245,000
565,000
Inventories
122,000
260,000
Land
664,000
Building
938,000
Furniture and Fixtures
Total
87,000
P1,128,000
36,000
P1,824,000
000,00
000,000 19
000,008
Account Payable
Notes Payable
P 178,000
200,000
Yare, Capital
diw 750,000
P 245,000
345,000
adi to omen
Alicol, Capital
Total
P1,128,000
1,234,000
P1,824,000
On March 5, 2025, Yares and Alico agreed to form a partnership contributing their assets and equities subject to the
following adjustments:
qining arboj su to nam
a. Accounts receivable of P15,000 in Yares' books and P30,000 in Alico's are uncollectible.
b. Inventories of P5,500 and P6,500 are worthless in Yares' and Alico's respective books.
Required:
1. In the books of Yares, prepare the necessary journal entries:
a. To record the adjustments to Yares' assets
b. To close the books of Yares of viande no 251qgque oroa snemu ni
2. In the…
Critically evaluate the progress and challenges in achieving a single set of global
accounting standards. Discuss the benefits and drawbacks of globalization in
accounting, providing relevant examples.
Critically assess the role of the Conceptual Framework in financial reporting and its influence on
accounting theory and practice. Discuss how the qualitative characteristics outlined in the
Conceptual Framework enhance financial reporting and contribute to decision-usefulness. Provide
examples to support your analysis.
a) Define research methodology in the context of accounting theory and discuss the
importance of selecting appropriate research methodology. Evaluate the strengths and
limitations of quantitative and qualitative approaches in accounting research. (10 marks)
b) Assess the role of modern accounting theories in guiding research in accounting.
Discuss how contemporary theories, such as stakeholder theory, legitimacy theory, and
behavioral accounting theory, shape…
Critically evaluate the progress and challenges in achieving a single set of global
accounting standards. Discuss the benefits and drawbacks of globalization in
accounting, providing relevant examples.
Critically assess the role of the Conceptual Framework in financial reporting and its influence on
accounting theory and practice. Discuss how the qualitative characteristics outlined in the
Conceptual Framework enhance financial reporting and contribute to decision-usefulness. Provide
examples to support your analysis.
a) Define research methodology in the context of accounting theory and discuss the
importance of selecting appropriate research methodology. Evaluate the strengths and
limitations of quantitative and qualitative approaches in accounting research. (10 marks)
b) Assess the role of modern accounting theories in guiding research in accounting.
Discuss how contemporary theories, such as stakeholder theory, legitimacy theory, and
behavioral accounting theory, shape…
Chapter 21 Solutions
REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)
Ch. 21 - Capital budgeting has the same focus as accrual...Ch. 21 - List and briefly describe each of the five stages...Ch. 21 - Prob. 21.3QCh. 21 - Only quantitative outcomes are relevant in capital...Ch. 21 - How can sensitivity analysis be incorporated in...Ch. 21 - Prob. 21.6QCh. 21 - Describe the accrual accounting rate-of-return...Ch. 21 - Prob. 21.8QCh. 21 - Lets be more practical. DCF is not the gospel....Ch. 21 - All overhead costs are relevant in NPV analysis....
Ch. 21 - Prob. 21.11QCh. 21 - Distinguish different categories of cash flows to...Ch. 21 - Prob. 21.13QCh. 21 - How can capital budgeting tools assist in...Ch. 21 - Distinguish the nominal rate of return from the...Ch. 21 - A company should accept for investment all...Ch. 21 - Prob. 21.17MCQCh. 21 - Which of the following statements is true if the...Ch. 21 - Prob. 21.19MCQCh. 21 - Nicks Enterprises has purchased a new machine tool...Ch. 21 - Prob. 21.21ECh. 21 - Capital budgeting methods, no income taxes. Yummy...Ch. 21 - Capital budgeting methods, no income taxes. City...Ch. 21 - Prob. 21.24ECh. 21 - Capital budgeting with uneven cash flows, no...Ch. 21 - Comparison of projects, no income taxes. (CMA,...Ch. 21 - Payback and NPV methods, no income taxes. (CMA,...Ch. 21 - DCF, accrual accounting rate of return, working...Ch. 21 - Prob. 21.29ECh. 21 - Prob. 21.30ECh. 21 - Project choice, taxes. Klein Dermatology is...Ch. 21 - Prob. 21.32ECh. 21 - Selling a plant, income taxes. (CMA, adapted) The...Ch. 21 - Prob. 21.36PCh. 21 - NPV and AARR, goal-congruence issues. Liam...Ch. 21 - Payback methods, even and uneven cash flows. Sage...Ch. 21 - Replacement of a machine, income taxes,...Ch. 21 - Recognizing cash flows for capital investment...Ch. 21 - NPV, inflation and taxes. Fancy Foods is...Ch. 21 - NPV of information system, income taxes. Saina...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as partner is shown as follows: Account Title Debit Credit Ato Cash reening smuo P 100,000 Accounts Receivable 250,000 Allowance for Uncollectible Accounts P 20,000 o Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 120,000 275,000 55,000 50,000 82,000 538,000 Lumanao, Capital Total P 745,000 P 745,000 Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the adjustments below. Lumanao accepted the offer. Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following: • The merchandise is to be valued at P93,000. The accounts receivable is estimated to be 90% collectible. • The equipment is to be valued at P200,000. The partners also agreed that the name of the partnership will be Nacho Business. Required: 1. In the books of…arrow_forwardIf data is unclear in image or image blurr then comment.arrow_forwardSolve correctly without using aiarrow_forward
- Give solution correctly no chatgptarrow_forwardProblem No. 1 On January 1, 2025, Manuel Cruz and Sherimae Diasalo agreed to form a partnership that will manufacture and sell biscuits. The partnership agreement specified that Cruz is to invest cash of P1,000,000 and Diasalo is to contribute land and building to serve as the office and factory of the business. The following amounts are applicable to the property of Diasalo: Acquisition Cost Fair Market Value Land Building P1,000,000 500,000 P1,500,000 850,000 During the formation, it was found out that Cruz has accounts receivable amounting to P70,000 and the partners agreed that it will be assumed by the partnership. The name of the partnership will be Fita Pan. Required: 1. Prepare journal entry to record: a. The investment of Cruz to the partnership b. The investment of Diasalo to the partnershipood relay ni 000,219 2. Prepare the statement of financial position of the partnership as of January 1, 2025 Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February…arrow_forwardA company's stock price is $80, with earnings per share (EPS) of $10 and an expected growth rate of 12%.arrow_forward
- Kazama owns JKL Corporation stock with a basis of $20,000. He exchanges this for $24,000 of STU stock and $8,000 of STU securities as part of a tax-free reorganization. What is Kazama's basis in the STU stock?arrow_forwardKensington Textiles, Inc. manufactures customized tablecloths. An experienced worker can sew and embroider 10 tablecloths per hour. Due to the repetitive nature of the work, employees take a 10-minute break after every 10 tablecloths. Additionally, before starting each batch of 10 tablecloths, workers spend 8 minutes cleaning and setting up their sewing machines. Calculate the standard quantity of direct labor for one tablecloth.arrow_forwardSolvearrow_forward
- Problem: The bank statement balance of $7,000 does not include a check outstanding of $1,000, a deposit in transit of $275, and another company's $250 check erroneously charged against your firm's account. The reconciled bank balance is__?arrow_forwardGiven step by step explanation general accounting questionarrow_forwardQuick answer of this accounting questionsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Capital Budgeting Introduction & Calculations Step-by-Step -PV, FV, NPV, IRR, Payback, Simple R of R; Author: Accounting Step by Step;https://www.youtube.com/watch?v=hyBw-NnAkHY;License: Standard Youtube License