Compute the payback limit for this boarding. (Cumulative net specie outflows must be entered subjoined a while a minus badge. Round your counterparts to 2 decimal places.) A record can be acquisitiond for $210,000 and used for 5 years, conceding the subjoinedcited net pays. In hanging net pays, double-declining et slander is applied, using a 5-year spirit and a cipher salvage prize. |
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Net pays | | $ | 13,000 | | | $ | 28,000 | | | $ | 53,000 | | | $ | 40,500 | | | $ | 103,000 | | | | | | | | | | | | | | | | | | | | | | | | |
Compute the record’s payback limit (repudiate taxes). (Round your comprised calculations to 3 decimal places and payback limit counterbisect to 3 decimal places.) Exercise 25-3 Payback limit computation; plain specie flows LO P1 Compute the payback limit for each of these two detached boardings: |
a. | A new frank formality for an strong record is expected to require $240,000 and enjoy a employmentable spirit of lewd years. The formality renders an incremental subjoined-tax pay of $69,230 each year subjoined deducting its straight-row slander. The predicted salvage prize of the formality is $9,000. | b. | A record requires $180,000, has a $13,000 salvage prize, is expected to definite splain years, and procure originate an subjoined-tax pay of $38,000 per year subjoined straight-row slander. |
Exercise 25-4 Accounting scold of come-back LO P2 A record requires $300,000 and is expected to render an subjoined-tax net pay of $9,000 each year. Management predicts this record has a 9-year employment spirit and a $60,000 salvage prize, and it uses straight-row slander. Appraise this record’s accounting scold of come-back. (Round your counterbisect to 2 decimal places.) Exercise 25-5 Payback limit and accounting scold of come-back on boarding LO P1, P2 B2B Co. is because the acquisition of equipment that would recognize the union to add a new issue to its row. The equipment is expected to require $480,000 subjoined a while a 12-year spirit and no salvage prize. It procure be depreciated on a straight-row cause. The union expects to hawk 192,000 aces of the equipment’s issue each year. The expected annual pay akin to this equipment prospers. |
| | | | Sales | $ | 300,000 | | Costs | | | | Materials, strive, and aloft (exclude slander) | | 160,000 | | Depreciation on new equipment | | 40,000 | | Selling and professional expenses | | 30,000 | | | | | | Total requires and expenses | | 230,000 | | | | | | Pretax pay | | 70,000 | | Income taxes (30%) | | 21,000 | | | | | | Net pay | $ | 49,000 | | | | | |
Exercise 25-6 Computing net exhibit prize LO P3 B2B Co. is because the acquisition of equipment that would recognize the union to add a new issue to its row. The equipment is expected to require $368,000 subjoined a while a 4-year spirit and no salvage prize. It procure be depreciated on a straight-row cause. K2B Co. concludes that it must achieve at lowest a 8% come-back on this boarding. The union expects to hawk 147,200 aces of the equipment’s issue each year. The expected annual pay akin to this equipment prospers. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use mismiswithhold content(s) from the tables granted.) |
| | | | Sales | $ | 230,000 | | Costs | | | | Materials, strive, and aloft (exclude slander) | | 81,000 | | Depreciation on new equipment | | 92,000 | | Selling and professional expenses | | 23,000 | | | | | | Total requires and expenses | | 196,000 | | | | | | Pretax pay | | 34,000 | | Income taxes (30%) | | 10,200 | | | | | | Net pay | $ | 23,800 | | | | | | |
Compute the net exhibit prize of this boarding. (Round "PV Factor" to 4 decimal places. Round your comprised calculations and last counterbisect to the rectilinear dollar aggregate.) |
Exercise 25-8 NPV and profitability index LO P3 Following is notification on two resource boardings animation considered by Jolee Company. The union requires a 6% come-back from its boardings. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1). (Use mismiswithhold content(s) from the tables granted.)) |
| Project A | Project B | Initial boarding | | $ | (186,325 | ) | | | $ | (148,960 | ) | | Expected net specie flows in year: | | | | | | | | | | | 1 | | | 53,000 | | | | | 33,000 | | | 2 | | | 50,000 | | | | | 59,000 | | | 3 | | | 92,295 | | | | | 57,000 | | | 4 | | | 94,400 | | | | | 79,000 | | | 5 | | | 56,000 | | | | | 29,000 | | | |
1(a) | For each resource plan appraise the net exhibit prize. (Round "PV Factor" to 4 decimal places. Round your comprised and last counterparts to the rectilinear dollar aggregate.) Exercise 25-11 Keep or substitute LO A1 Xinhong Union is because replacing one of its manufacturing records. The record has a book prize of $38,000 and a cherishing employmentable spirit of 5 years, at which occasion its salvage prize procure be cipher. It has a popular dispense prize of $48,000. Unsteady manufacturing requires are $33,000 per year for this record. Notification on two resource substitutement records prospers. |
| Alternative A | Alternative B | Cost | $ | 117,000 | | $ | 117,000 | | Variable manufacturing requires per year | | 22,100 | | | 10,500 | | |
Calculate the aggregate fluctuate in net pay if Resource A is adopted. (Cash outflows should be implied by a minus badge.) |
Exercise 25-12 Portion or rework LO A1 A union must run betwixt portionping or reworking aces that do not by neglect. The union has 10,000 imperfect aces that require $5.70 per ace to molding. The aces can be sold as is for $2.50 each, or they can be reworked for $3.50 each and then sold for the ample expense of $9.50 each. If the aces are sold as is, the union procure enjoy to institute 10,000 substitutement aces at a require of $5.70 each, and hawk them at the ample expense of $9.50 each. |
(1) | What is the incremental pay from hawking the aces as portion and reworking and hawking the aces? |
Exercise 25-13 Vill to recognize attached duty or not LO A1 Farrow Co. expects to hawk 500,000 aces of its issue in the present limit subjoined a while the subjoinedcited results. |
| | | | | Sales (500,000 aces) | | $ | 7,500,000 | | Costs and expenses | | | | | Direct materials | | | 1,000,000 | | Direct strive | | | 2,000,000 | | Overhead | | | 500,000 | | Selling expenses | | | 750,000 | | Administrative expenses | | | 1,285,000 | | | | | | | Total requires and expenses | | | 5,535,000 | | | | | | | Net pay | | $ | 1,965,000 | | | | | | | |
The union has an occasion to hawk 50,000 attached aces at $12 per ace. The attached sales would not desire its popular expected sales. Direct materials and strive requires per ace would be the corresponding for the attached aces as they are for the formal aces. However, the attached quantity would compose the subjoinedcited incremental requires: (1) aggregate aloft would extension by 16% and (2) professional expenses would extension by $215,000. |
Calculate the collectively aggregate net pay if the union recognizes the offer to hawk attached aces at the inaudible expense of $12 per ace. Exercise 25-14 Make or buy vill LO A1 Gilberto Union popularly moldings one of its critical bisects at a require of $3.30 per ace. This require is inveterate on a regular issueion scold of 80,000 aces per year. Unsteady requires are $1.80 per ace, urban requires akin to making this bisect are $80,000 per year, and allocated urban requires are $40,000 per year. Allocated urban requires are necessary whether the union makes or buys the bisect. Gilberto is because buying the bisect from a supplier for a quoted expense of $3.00 per ace guaranteed for a three-year limit. |
Calculate the aggregate incremental require of making 80,000 aces. (Round require per ace counterparts to 2 decimal places.) |
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Exercise 25-15 Hawk or process vill LO A1 Cobe Union has already moldingd 25,000 aces of Issue A at a require of $25 per ace. The 25,000 aces can be sold at this range for $410,000. Alternatively, the aces can be exalt processed at a $240,000 aggregate attached require and be converted into 5,600 aces of Issue B and 11,400 aces of Issue C. Per ace hawking expense for Issue B is $106 and for Issue C is $54. |
1. | Prepare an anatomy that shows whether the 25,000 aces of Issue A should be processed exalt or not. Exercise 25-16 Anatomy of pay goods from eliminating departments LO A1 [The subjoinedcited notification applies to the questions displayed beneath.] Suresh Co. expects its five departments to render the subjoinedcited pay for present year. |
| Dept. M | Dept. N | Dept. O | Dept. P | Dept. T | Sales | | $ | 41,000 | | | $ | 15,700 | | | | $ | 34,500 | | | $ | 38,000 | | | | $ | 15,700 | | | Expenses | | | | | | | | | | | | | | | | | | | | | | | | Avoidable | | | 4,100 | | | | 13,800 | | | | | 11,300 | | | | 7,000 | | | | | 18,400 | | | Unavoidable | | | 17,000 | | | | 7,700 | | | | | 2,700 | | | | 14,000 | | | | | 5,400 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total expenses | | | 21,100 | | | | 21,500 | | | | | 14,000 | | | | 21,000 | | | | | 23,800 | | | | | | | | | | | | | | | | | | | | | | | | | | | Net pay (loss) | | $ | 19,900 | | | $ | (5,800 | ) | | | $ | 20,500 | | | $ | 17,000 | | | | $ | (8,100 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reappraise and furnish the departmental pay statements (including a collectively aggregate post) for the union inferior each of the subjoinedcited detached scenarios. |
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Exercise 25-17 Sales mix vill and anatomy LO A1 Colt Union owns a record that can yield two specialized issues. Genesis occasion for Issue TLX is two aces per hour and for Issue MTV is five aces per hour. The record’s space is 2,000 hours per year. Both issues are sold to a solitary customer who has agreed to buy all of the union’s output up to a ultimatum of 3,400 aces of Issue TLX and 1,980 aces of Issue MTV. Selling expenses and unsteady requires per ace to yield the issues prosper. |
| Product TLX | | Product MTV | | Selling expense per ace | | $ | 11.50 | | | | $ | 6.90 | | | Variable requires per ace | | | 3.45 | | | | | 4.14 | | | |
Determine the union's most useful sales mix and the donation latitude that results from that sales mix. (Round require per ace counterparts to 2 decimal places.) |
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