A property title search firm is contemplating using online software to increase the productivity of the researcher performing the search. Currently, an average of 64 minutes is needed to do a title search. The researcher cost is $1.70 per minute. Clients are charged a fee of $410. Company A’s software would reduce the average search time by 20 minutes, at a cost of $3.50 per search. Company B’s software would reduce the average search time by 21 minutes at a cost of $5.50 per search.
a. Calculate the productivity in terms of revenue per dollar of input.
b. Which option would have the highest productivity in terms of revenue per dollar of input?
a) Company A
b) Company B
c) Current

Answers

Answer 1

Answer:

a. Productivity in terms of revenue per dollar input:

Cost = Average time taken * Cost per minute + additional cost per search

Current cost = 64 * 1.70 = $108.80

Company A cost = (64 - 20 mins) * 1.70 + 3.50 = $78.30

Company B cost = (64 - 21) * 1.70 + 5.50 = $78.60

Productivity = Client fee / Cost

Current productivity

= 410 / 108.80

= $3.77

Company A

= 410 / 78.30

= $5.24

Company B

= 410 / 78.60

= $5.22

b. Company A is best.


Related Questions

A company purchased $4,000 worth of merchandise. Transportation costs were an additional $350. The company returned $275 worth of merchandise and then paid the invoice within the 2% cash discount period. The total cost of this merchandise is:________
A. $3,725.00.
B. $3,925.00.
C. $3,995.00.
D. $4,000.50
E. $4,075.00.

Answers

The total cost of the merchandise is $3,995 aka C. Hope this helps !!

The total cost of the merchandise purchased by the company is E. $4,075.00.

Data and Calculations:

Cost of goods purchased =$4,000

Freight-in = $350

Returned goods = $275

The total cost of goods = $4,075 ($4,000 + $350 - $275)

The cash discount received for early payment = $81.50 ($4,075 x 2%).

Thus, the total cost of the merchandise purchased by the company is E. $4,075.00.

Learn more about the cost of goods purchased here: https://brainly.com/question/15864970

What is the present value of an annuity that pays $58 per year for 13 years and an additional $1,000 with the final payment

Answers

Answer:

$882.03

Explanation:

Interest rate used is 7.23%

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow in year 1 to 12 = 58

cash flow in year 13 = 1058

I = 7.23

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

Carpet Renewal dyes carpets for residential customers. The company is interested in estimating fixed and variable costs. The following data are available for the month of June when 420 carpets were dyed:
Office rent $ 1,250
Depreciation - equipment 900
Cleaning supplies 5,140
Hourly wages 11,000
Transportation (variable) 3,600
Owner’s salary 3,100
Total $24,990
Using account analysis, how much is estimated variable cost per carpet?
a. $59.50
b. $52.12
c. $47.00
d. $38.43

Answers

Answer: c. $47 per carpet

Explanation:

Total variable costs are:

= Cleaning supplies + Hourly wages  + Transportation

= 5,140 + 11,000 + 3,600

= $19,740

The variable cost per carpet is:

= Total variable cost / Number of carpets dyed

= 19,740 / 420

= $47 per carpet

On the Tokyo Stock Exchange, Honda Motor Company stock closed at ¥2,915 per share on Monday, June 6, 2016. Honda trades as an ADR on the NYSE. One underlying Honda share equals one ADR. On June 6, 2016, the ¥/$ exchange rate was ¥107.65/$1.00. (Round your answer to 2 decimal places.) At this exchange rate, what is the no-arbitrage U.S. dollar price of one ADR?

Answers

Answer:

$27.08

Explanation:

Calculation to determine the no-arbitrage U.S. dollar price of one ADR

Using this formula

No-arbitrage U.S. dollar price of one ADR=Stock closed per share /Exchange rate

Let plug in the formula

No-arbitrage U.S. dollar price of one ADR=¥2,915 / ¥107.65

No-arbitrage U.S. dollar price of one ADR=$27.078

No-arbitrage U.S. dollar price of one ADR=$27.08 (Approximately)

Therefore the no-arbitrage U.S. dollar price of one ADR is $27.08

MC Qu. 123 Fallow Corporation has... Fallow Corporation has two separate profit centers. The following information is available for the most recent year: West Division East Division Sales (net) $450,000 $600,000 Salary expense 51,000 65,000 Cost of goods sold 155,000 275,000 The West Division occupies 11,250 square feet in the plant. The East Division occupies 6,750 square feet. Rent, which was $ 90,000 for the year, is an indirect expense and is allocated based on square footage. Compute operating income for the West Division.

Answers

Answer:

$187,750

Explanation:

Computation for operating income for the West Division.

OPERATING INCOME FOR THE WEST DIVISION

Sales $450,000

Less Cost of goods sold ($155,000)

Gross profit $295,000

($450,000-155,000)

Less: Salary Expense ($51,000)

Allocated rent ($56,250)

($90,000 * 11250/18,000)

West Division income $187,750

Total area of both division = 11,250 + 6,750 = 18,000 square feet

Therefore operating income for the West Division is $187,750

You are considering an investment project with an internal rate of return of 8.7 percent, a net present value of $393, and a payback period of 2.44 years. Which one of the following is correct given this information?
A. The discount rate used to compute the net present value is equal to the Internal rate of return.
B. The discounted payback period will be less than 2.44 years.
C. The required payback period must be greater than 2.44 years.
D. The discount rate used in computing the net present value was less than 8.7 percent.
E. This project should be rejected based on the net present value.

Answers

Answer:

Hence the correct option is d) The discount rate used in computing the net present value was less than 8.7 percent.

Explanation:  

As the discount rate increases, the present value decreases, and also at IRR the present value is zero, thus the answer is:-

d) The discount rate used in computing the net present value was less than 8.7 percent

Answer:

D). The discount rate used in computing the net present value was less than 8.7 percent.

Explanation:

'Net Present Value' is described as the 'difference that exists between existing values of cash inflows, as well as, cash outflows for a particular time period.' This assists in evaluating the profitability of an investment and make worthy decisions regarding investment.

As per the details provided, the discount rate considered for estimating the Net Present Value of the investment had been lesser than 8.7% which shows that the Net Present Value in positive i.e. $ 393. However, the investment project is not beneficial at all rather it may cause losses because the required return rate is 9.5% which is actually lesser and therefore, the project would prove incompetent and it must be rejected at once. Thus, option D is the correct answer.

analysis of the meaning of the bill of lading

Answers

Answer:

A bill of lading is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. 12 A bill of lading is a document of title, a receipt for shipped goods, and a contract between a carrier and shipper.

Explanation:

I searched it up if its not what your looking for my bad sorry.

The following standards for variable manufacturing overhead have been established for a company that makes only one product: The following data pertain to operations for the last month: What was the variable overhead efficiency/quantity variance for the month? Group of answer choices

Answers

Answer:

$17,871 U

Explanation:

Note The missing word have been attached as picture below

Variable overhead efficiency variance = (Standard hour - Actual hour) * Standard rate

Variable overhead efficiency variance = (1,480 hours - 2,775 hours) * $13.80

Variable overhead efficiency variance = 1,295 hours * $13.80

Variable overhead efficiency variance = $17,871 U

Blackwell Industries received a 120-day, 9% note for $180,000, dated August 10 from a customer on account. Assume 360-day year. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. When required, round your answers to the nearest dollar. $fill in the blank abd719f5d049ff0_2 c. Journalize the entry to record the receipt of the payment of the note at maturity. If an amount box does not requ

Answers

Answer: a. 120 days

b. $185400

Explanation:

a. The due date of the note will be:

August = 31-10 = 21 days

September = 30 days

October = 31 days

November = 30 days

December = 8 days

Total = 120 days

b. The maturity value of the note will be:

= 180000 + (180000 × 9% * 120/360)

= 180000 + (180000 × 0.09 × 0.33)

= 180000 + 5346

= 185346

= 185400 to nearest dollar

3. 8 december

Debit Cash $ 185,400

Credit Note Receivable $180,000

Credit Interest Revenue $5,400


If a firm enjoys economies of scale,

its average total cost will increase as production increases

its total costs will decrease as production increases

its average total cost will decrease as production increases

its marginal revenue will increase as production increases

Answers

Answer: Its average total cost will decrease as production increases

Explanation: Variable cost will decrease as a result of economies of scale, therefore the cost/unit or average total cost will decrease.

Riverbed Corporation purchased machinery on January 1, 2022, at a cost of $278,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $32,800. The company is considering different depreciation methods that could be used for financial reporting purposes.

Required:
Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate.

Answers

Answer:

a. Under straight-line method, annual depreciation expenses are as follows:

Year         Annual depreciation expense ($)

2022                          61,300

2023                          61,300

2024                          61,300

2025                          61,300

b.  Under the declining-balance method using double the straight-line rate, annual depreciation expenses are as follows:

Year         Annual depreciation expense ($)

2022                            139,000

2023                             69,500

2024                             34,750

2025                               1,950

Explanation:

a. Prepare a separate depreciation schedule for the machinery using the straight-line method.

Note: See part a of the attached excel file for the depreciation schedule for Straight-line method.

In the attached excel file, the depreciation rate used for the Straight-line method is calculated as follows:

Straight line depreciation rate = 1 / Estimated useful life = 1 / 4 = 0.25, or 25%

From part a of the attached excel file, we have:

Year         Annual depreciation expense ($)

2022                          61,300

2023                          61,300

2024                          61,300

2025                          61,300

b. Prepare a separate depreciation schedule for the machinery using the declining-balance method using double the straight-line rate.

Note: See part b of the attached excel file for the depreciation schedule for double-declining-balance method.

In the attached excel file, the depreciation rate used for the Double declining-balance method is calculated as follows:

Double-declining depreciation rate = Straight line depreciation rate * 2 = 25% * 2 = 50%

From part b of the attached excel file, we have:

Year         Annual depreciation expense ($)

2022                            139,000

2023                             69,500

2024                             34,750

2025                               1,950

Note:

Under this double-declining-balance method, the depreciation expenses for 2025 is calculated by deducting the salvage value of $32,800 from the 2025 Beginning depreciable amount (i.e. $34,750 - $32,800 = $1,950). The residual value of $32,800 therefore represents the book value on December 31, 2025.

You plan to deposit $1,800 per year for 5 years into a money market account with an annual return of 3%. You plan to make your first deposit one year from today.

Required:
a. What amount will be in your account at the end of 6 years?
b. Assume that your first withdrawal will be made the day you retire. Under this assumption, what amount do you now need in your retirement account the day you retire?

Answers

Answer:

1-a. The amount that will be in your account at the end of 6 years is $11,643.14.

1-b. The amount that will be in your account at the end of 6 years is $11,992.43.

2-a. The amount you need in your retirement account the day you retire is $590,938.17.

2-b. The amount you need in your retirement account the day you retire is $679,578.89.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

1. You plan to deposit $1,800 per year for 6 years into a money market account with an annual return of 3%. You plan to make your first deposit one year from today.

a. What amount will be in your account at the end of 6 years? Round your answer to the nearest cent. Do not round intermediate calculations.

b. Assume that your deposits will begin today. What amount will be in your account after 6 years? Round your answer to the nearest cent. Do not round intermediate calculations.

2. You and your wife are making plans for retirement. You plan on living 30 years after you retire and would like to have $90,000 annually on which to live. Your first withdrawal will be made one year after you retire and you anticipate that your retirement account will earn 15% annually.

a. What amount do you need in your retirement account the day you retire? Round your answer to the nearest cent. Do not round intermediate calculations.

b. Assume that your first withdrawal will be made the day you retire. Under this assumption, what amount do you now need in your retirement account the day you retire? Round your answer to the nearest cent. Do not round intermediate calculations.

The explanation of the answers is now provided as follows:

1-a. What amount will be in your account at the end of 6 years? Round your answer to the nearest cent. Do not round intermediate calculations.

Since you plan to make your first deposit one year from today, this can be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:

FV = D * (((1 + r)^n - 1) / r) ................................. (1)

Where,

FV = Future value or the amount that will be in your account at the end of 6 years = ?

D = Annual deposit = $1,800

r = Annual return rate = 3%, or 0.03

n = number of periods = 6

Substituting the values into equation (1), we have:

FV = $1,800 * (((1 + 0.03)^6 - 1) / 0.03) = $11,643.14

Therefore, the amount that will be in your account at the end of 6 years is $11,643.14.

1-b. Assume that your deposits will begin today. What amount will be in your account after 6 years? Round your answer to the nearest cent. Do not round intermediate calculations.

Since it is assumed that your deposits will begin today, this can be calculated using the formula for calculating the Future Value (FV) of an Annuity Due as follows:

FV = M * (((1 + r)^n - 1) / r) * (1 + r) ................................. (2)

Where,

FV = Future value or the amount that will be in your account at the end of 6 years = ?

D = Annual deposit = $1,800

r = Annual return rate = 3%, or 0.03

n = number of years = 6

Substituting the values into equation (2), we have:

FV = $1,800 * (((1 + 0.03)^6 - 1) / 0.03) * (1 + 0.03) = $11,992.43

Therefore, the amount that will be in your account at the end of 6 years is $11,992.43.

2-a. What amount do you need in your retirement account the day you retire? Round your answer to the nearest cent. Do not round intermediate calculations.

Since your first withdrawal will be made one year after you retire, this can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (3)

Where:

PV = Present value or the amount you need in your retirement account the day you retire = ?

P = Annual withdrawal = $90,000

r = Annual return rate = 15%, or 0.15

n = number of years = 30

Substituting the values into equation (3), we have:

PV = $90,000 * ((1 - (1 / (1 + 0.15))^30) / 0.15) = $590,938.17

Therefore, the amount you need in your retirement account the day you retire is $590,938.17.

2-b. Assume that your first withdrawal will be made the day you retire. Under this assumption, what amount do you now need in your retirement account the day you retire? Round your answer to the nearest cent. Do not round intermediate calculations.

Since it is assumed that that your first withdrawal will be made the day you retire, this can be determined using the formula for calculating the present value of an annuity due as follows:

PV = P * ((1 - (1 / (1 + r))^n) / r) * (1 + r) …………………………………. (4)

Where:

PV = Present value or the amount you need in your retirement account the day you retire = ?

P = Annual withdrawal = $90,000

r = Annual return rate = 15%, or 0.15

n = number of years = 30

Substituting the values into equation (4), we have:

PV = $90,000 * ((1 - (1 / (1 + 0.15))^30) / 0.15) (1 + 0.15) = $679,578.89

Therefore, the amount you need in your retirement account the day you retire is $679,578.89.

Vortex Company operates a retail store with two departments. Information about those departments follows:

Department A Department B
Sales $832,000 $448,000
Cost of goods sold 410,000 291,200
Direct expenses:
Salaries 117,000 86,000
Insurance 13,500 10,900
Utilities 21,000 25,500
Depreciation 18,000 13,500
Maintenance 6,400 5,200

The company also incurred the following indirect costs.

Salaries $29,000
Insurance 6,600
Depreciation 14,800
Office expenses 40,000

Indirect costs are allocated as follows: salaries on the basis of sales; insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. Additional information about the departments follows.

Department Square footage Number of employees
A 29,400 66
B 12,600 44

Required:
a. Determine the departmental contribution to overhead and the departmental net income for department A and Department B.
b. Should Department B be eliminated?

Answers

Answer:

Vortex Company

                                Department A       Department B

a. Contribution margin   $246,100                 $15,700

Net income                     $188,270                ($16,870)

b. Department B should not be eliminated unless the indirect costs allocated to it can be eliminated as well.

Explanation:

a) Data and Calculations:

                                Department A       Department B

Sales                            $832,000              $448,000

Cost of goods sold        410,000                 291,200

Gross profit                 $422,000              $156,800

Direct expenses:

Salaries                           117,000                  86,000

Insurance                         13,500                   10,900

Utilities                             21,000                  25,500

Depreciation                    18,000                   13,500

Maintenance                     6,400                    5,200

Total direct expenses $175,900                $141,100

Contribution margin   $246,100                 $15,700

Total indirect expenses  57,830                 32,570

Net income                 $188,270               ($16,870)

Department   Square footage   Number of employees

A                             29,400                         66

B                              12,600                         44

Total                       42,000                        110

Indirect Costs:       Costs            Rates            Department A   Department B

Salaries               $29,000   $0.02266                $18,850            $10,150 ($448/$1,280)

Insurance                6,600     $0.15714                    4,620                1,980

Depreciation          14,800   $0.35238                  10,360                4,440

Office expenses  40,000      $363.64                 24,000              16,000

Total costs         $90,400                                   $57,830           $32,570

A company has already incurred $7,200 of costs in producing 6,000 units of Product XY. Product XY can be sold as is for $31 per unit. Instead, the company could incur further processing costs of $10 per unit and sell the resulting product for $35 per unit. Should the company sell Product XY as is or process it further

Answers

Answer: Sell as is or lose $36,000

Explanation:

If the company sells as is, they could sell at a price of $31 per unit.

If they process further and sell at $35, they would incur a cost of $10 per unit which leaves them with profit of:

= 35 - 10

= $25

This is lower than the selling price if they sell as is and will therefore give a loss of:

= (31 - 25) * 6,000 units

=- $36,000

Company should sell as is so as not to lose $36,000

Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are:________
a. $49,750
b. $47,000
c. $49,000
d. $51,000

Answers

Answer:

c. $49,000

Explanation:

Calculation to determine what the cash proceeds to Chang Co. are:

Cash proceed=$50,000-($50,000*6%*120/360)

Cash proceed=$50,000-$1,000

Cash proceed=$49,000

Therefore the cash proceeds to Chang Co. are:$49,000

g If there is a breach of contract, the objective of the remedy in the breach contract case will be to: Question 21 options: place the parties back into the position that they would have been in had there been no contract punish the party that committed breach of contract provide both parties relief place the non breaching party into the position that they would have been had the contract not been breached

Answers

Answer: place the non breaching party into the position that they would have been had the contract not been breached

Explanation:

A contract is meant to satisfy the reasons for which the contract was gone into for both parties. If one party breaches the contract, the party that did not breach should still have their reason for entering the contract satisfied because they did what they were supposed to do according to the contract.

This is why the purpose of a breach of contract remedy is to ensure that this non-breaching party does indeed get what was supposed to come to them by the contract.

Given the following data: Average Operating Assets $250,000 Total Liabilities $100,000 Sales $600,000 Contribution Margin $150,000 Net Operating Income $30,000 Return on investment (ROI) would be: a. 5%. b. 12%. c. 25%. d. 60%.

Answers

Answer:

b. 12%.

Explanation:

The computation of the return on investment is given below:

return on investment is

= net income ÷ avergae total assets

= ($30,000 ÷ $250,000)

= 12%

Hence, the return on investment is 12%

Therefore the option b is correct

And, the same should be considered and relevant

True or false: Some contemporary models of communications have reconceptualized the classic Think-Feel-Do model to the Do-Think-Feel model to reflect more accurately actual communications effects given a particular type of product or purchase occasion. True Fals

Answers

Answer:

true

Explanation:

got it from quizlet.

The first three cars I bought all fell apart around 50,000 miles. It was called planned obsolescence and no one seemed to care until companies entered the market and promised 70,000, then 80,000, and finally 100,000 warranties. What sets a great car apart from a good one now is not the quality, which is assumed, but performance, safety and fuel economy. A car that can achieve all three is highly sought after. In the automotive market, performance, safety and fuel economy are sterling examples of:

Answers

Answer:

Order Winners

Explanation:

Order winners basically mean the winning attributes that customers will seek in order to successfully buy a product.

This is in fact because a customer's decision in buying a product is based on the value for money, so things such as price, availability, performance, and design are things to be considered by customers before deciding on the product.

As in the case above, the winning attributes in making a car great are performance, safety, and fuel economy. If such is found in a car then it would lead the car to be highly sought by the customers.

A rods manufacturer makes rods with a length that is supposed to be 11 inches. A quality control technician sampled 40 rods and found that the sample mean length was 11.05 inches and the sample standard deviation was 0.21 inches. The technician claims that the mean rod length is more than 11 inches.
1. What type of hypothesis test should be performed?
2. What is the test statistic?
3. What is the number of degrees of freedom?
4. Does sufficient evidence exist at the α=0.01 significance level to support the technician's claim?

Answers

Answer:

H0 : μ = 11

H0 : μ > 11 ;

Test statistic = 1.506

Degree of freedom = 39

There isn't sufficient evidence to conclude that mean length of rod is greater than 11.05 inches

Explanation:

Given :

Mean length, μ = 11

Sample Standard deviation, s = 0.21

Sample mean, xbar = 11.05

Sample size, n = 40

The hypothesis :

H0 : μ = 11

H0 : μ > 11

The test statistic :

This a one sample t test :

Hence, test statistic would be :

T = (xbar - μ) ÷ (s/√(n))

T = (11.05 - 11) ÷ (0.21/√(40))

T = 0.05 / 0.0332039

T = 1.506

The degree of freedom ; df ;

df = n - 1 ; df = 40 - 1 = 39

The Critical value ;

Tcritical(0.01, 39) = 2.426

Decision region :

Reject H0 if Test statistic > TCritical

Since 1.506 < 2.426 ; WE fail to reject H0 and conclude that there isn't sufficient evidence to conclude that mean length of rod is greater than 11.05 inches

Corris Co. accumulates the following data concerning a mixed cost, using miles as the activity level. Miles Driven Total Cost January 10,000 $17,000 February 8,000 13,500 March 9,000 14,400 April 7,000 12,500 Compute the variable and fixed cost elements using the high-low method. (Round variable cost to 2 decimal places, e.g. 15.25.)

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Miles Driven Total Cost

January 10,000 $17,000

February 8,000 13,500

March 9,000 14,400

April 7,000 12,500

To calculate the variable cost per unit and the total fixed cost, we need to use the following formula:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (17,000 - 12,500) / (10,000 - 7,000)

Variable cost per unit= $1.5

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 17,000 - (1.5*10,000)

Fixed costs= $2,000

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 12,500 - (1.5*7,000)

Fixed costs= $2,000

Next year, we will be in a boom, bust, or normal state with 25%, 25% and 50% probabilities respectively. Apple will return 15%, -22% and 7% in each state (again respectively).
a) What is the expected return for Apple next year?
b) What is the standard deviation of returns for Apple next year?

Answers

Answer:

a. 1.75%b. 14.10%

Explanation:

a. Expected return:

This will be a weighted average of the returns in different states.

= (25% * 15%) + (25% * -22%) + (50% * 7%)

= 1.75%

b. Standard deviation:

= √ Variance

= √(25% * (15% - 1.75%)²) + (25% * (-22% - 1.75%)²) + (50% * (7% - 1.75%)²)

= √0.01986875

= 14.10%

If a firm has a cash cycle of 30 days and an operating cycle of 64 days, what is its average payment period

Answers

Answer: 34 days

Explanation:

The average payment period is a measure that is used to show the time the firm takes on average to pay its creditors.

The formula is:

Cash cycle = Operating cycle - Average payment period

30 = 64 - APP

APP + 30 = 64

APP = 64 - 30

APP = 34 days

(Ignore income taxes in this problem.) Your Company has a truck that needs a new engine that would cost $35,000. This will extend the useful life of the truck by 5 years. As an alternative, Your Company could buy a brand new truck for $120,000. The new truck would also last 5 years. The annual operating expenses of the old truck are $8,500. The annual operating expenses of the new truck will only be $5,000. The old truck has a salvage value of $12,000 now and $3,500 in 5 years. The new truck is expected to have a $10,000 salvage value in 5 years. Your Company discount rate is 6%. What is the net present value of the decision to buy the new truck instead of repairing the old truck

Answers

Answer:

Hence the net cost to the company is 68,160.

NPV to buy a new truck instead of repairing  

NPV = -65390

Explanation:

Step 1:-

P.V. of Old Truck Repaired  

Given  

Discount rate = 6%  

New engine = 35000  

Life = 5 years  

Annual operating expenses = 8500  

Salvage (after 5 years)= 3500

Step 2:-  

Repair  

Net Cost to company  = Cost + Annual operating expenses x P.V. Annuity              

                                               Factor (6%, 5) - Salvage value x P.V. Intrinsic  

                                              Factor (6%, 5)  

 P.V.A.F. (6%, 5)= [tex]\sum_{5}^{1}1 / (1.06)^{n} = 4.21[/tex]  

 n = 4.21

 P.V.I.F. (6%, 5) = [tex]1/ (1.06)^{5} =0.75[/tex]

 

Net Cost to company:  = 35000 + 8500 x 4.21 - 3500 x 0.75  

= 35000 + 35785 - 2625  

= 68,160

P.V. of New truck purchased  

New Truck  

Cost = 120000  

Discount rate = 6%  

Life = 5 years  

Annual operating expenses = 5000  

Salvage (after 5 years)= 10000  

Net Cost to company:  = Cost + Annual operating expenses x P.V. Annuity

                                           Factor (6%, 5) - Salvage value x P.V. Intrinsic  

                                                                                            Factor (6%, 5)  

= 120000 + 5000 x 4.21 - 10000 x 0.75  

= 120000 + 21050 - 7500  

= 133550

NPV to buy a new truck instead of repairing  

NPV = Net cost of repairing - Net cost of new truck  

= 68160 - 133550  

= -65390

asino Inc. expects to pay a dividend of $3 per share at the end of year 1 (Div1) and these dividends are expected to grow at a constant rate of 6 percent per year forever. If the required rate of return on the stock is 18 percent, what is the current value of the stock today?

Answers

Answer:

the current stock of the value today is $25

Explanation:

The computation of the current stock of the value today is shown below:

Next year dividend D1 = $3

growth rate g =6% forever

rate of return = 18%

So,

Current Stock Price P = D1 ÷ (r - g)

=3 ÷ (18% - 6%)

= 3 ÷ 12%

= 3 ÷ 0.12

= $25

Hence, the current stock of the value today is $25

When comparing the results of using the direct, sequential, and reciprocal services methods of allocating support department costs to production departments, which of the following statements is true for a manufacturing company that has a total of $1,500,000 in support costs to allocate?
a.The reciprocal services method allocates more than $1,500,000 to the production departments.
b.The reciprocal services method can be viewed as a compromise on accuracy and difficulty in allocating the $1,500,000 because it considers some, though not all, inter-support-department services and is easier to compute than the direct method.
c.The direct method yields the most accurate allocation of the $1,500,000.
d.The sequential method can be viewed as a compromise on accuracy and difficulty in allocating the $1,500,000 because it considers some, though not all, inter-support-department services and is easier to compute than the reciprocal services method.

Answers

Answer: d. The sequential method can be viewed as a compromise on accuracy and difficulty in allocating the $1,500,000 because it considers some, though not all, inter-support-department services and is easier to compute than the reciprocal services method

Explanation:

For a a manufacturing company that has a total of $1,500,000 in support costs to allocate, it should be noted that the sequential method can be viewed as a compromise on accuracy and difficulty in allocating the $1,500,000 because it considers some, though not all, inter-support-department services and is easier to compute than the reciprocal services method

Groupon offers online coupons for bargains at local shops and restaurants. Which of the following is a reason that rivals are limiting its growth?
a. Not many firms possess the same capability
b. Its core capability is easily imitated
c. Its core capability is not easily imitated.
d. There are few equivalent capabilities.

Answers

Answer:

b. Its core capability is easily imitated

Explanation:

In Business management, a strategy can be defined as a set of guiding principles, actions and decisions that an organization combines so as to achieve its business goals, attract customers and possess a competitive advantage over its rivals in the industry.

In this scenario, Groupon offers online coupons for bargains at local shops and restaurants. A reason that rivals are limiting its growth is simply because its core capability is easily imitated i.e offering of coupons for bargains.

Comparative advantage in economics is the ability of an individual or country to produce a specific good or service at a lower opportunity cost better than another individual or country.

The comparative advantage gives a country a stronger sales margin than their competitors as they are able to sell their specific products or render their peculiar services at a lower opportunity cost.

Job enlargement tends to deter an employee's development because:_________

a. it is so time-consuming.
b. means adding new challenges and responsibilities to an employee's current job.
c. means moving the position up the organizational hierarchy.
d. refers to hiring more people for the same job category.

Answers

Answer:

b. means adding new challenges and responsibilities to an employee's current job.

Explanation:

Job enlargement refers to rise in the scope of the job via extending the range with respective to the duties and responsibilities of the job normally at the similar level. It means it added the different kind of activities at the similar level and the same is to be added in the existing job

So here the fear in the employee development is that they need to add the new challenges and responsibilities

Therefore the option b is correct

The common stock of Eddie's Engines, Inc. sells for $45.68 a share. The stock is expected to pay $4.10 per share next year. Eddie's has established a pattern of increasing their dividends by 6.2 percent annually and expects to continue doing so. What is the market rate of return on this stock?
a. 15.18 percent
b. 7.26 percent
c. 8.98 percent
d. 17.67 percent
e. 11.14 percent

Answers

Answer:

no entiendo la verdad es que yo hablo español y no entiendo ajaj espero te ayude

Explanation:

15.18

Harrison Ford Company has been approached by a new customer with an offer to purchase 10,000 units of its model IJ5 at a price of $4.00 each. The new customer is geographically separated from the company's other customers, and existing sales would not be affected. Harrison normally produces 75,000 units of IJ5 per year but only plans to produce and sell 60,000 in the coming year. The normal sales price is $12 per unit. Unit cost information for the normal level of activity is as follows:

Direct Materials $1.75
Direct Labor 2.50
Variable Overhead 1.50
Fixed Overhead 3.25
Total $9.00

Required:
a. What are the relevant costs and benefits of the two alternatives (accept or reject the special order)?
b. By how much will operating income increase or decrease if the order is accepted?

Answers

Answer:

a. The relevant costs and benefits of the two alternatives are as follows:

Relevant costs = $57,500

Relevant benefits = $40,000

b. Operating income will decrease if the order is accepted by $17,500.

Explanation:

a. What are the relevant costs and benefits of the two alternatives (accept or reject the special order)?

Note that accepting the special order will increase the planned production from 60,000 to 70,00. Since this still lower than normal 75,000 units of production, this implies that Fixed Overhead will not be incurred when the order is accepted. Therefore, the Fixed Overhead is not relevant in this situation.

Therefore, the relevant costs and benefits of the two alternatives are as follows:

Relevant costs = Units of special order * (Direct Materials + Direct Labor + Variable Overhead) = 10,000 * ($1.75 + $2.50 + $1.50) = $57,500

Relevant benefits = Revenue from the special order = Units of special order * Unit price of special order = $10,000 * $4 = $40,000

b. By how much will operating income increase or decrease if the order is accepted?

Amount of decrease in operating income = Relevant costs - Relevant benefits = $57,500 - $40,000 = $17,500

Since the relevant costs will greater than the relevant benefits, it can be observed from the calculation above that operating income will decrease if the order is accepted by $17,500.

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