Logan Green decided to build an earth friendly home. He owned
the land, but had to seek financing to cover the cost of
construction. Conglomerate Mortgage Company offered him a
construction loan where no payments were made until one month after
the certificate of occupancy was issued. After that the loan would
convert to a standard 30 year fixed rate mortgage. Logan borrowed a
lump sum of $440500 at 4% per year compounded monthly. Logan
received his certificate of occupancy exactly 12 months after
taking out the loan. What are his monthly payments?
$
How much interest does he pay in the first full year of making
payments? $
In: Economics
A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $18,500. The instrument will be used for 6 years and be worth $3,000 at that time. The annual cost of use and maintenance will be $13,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $32,500, with use and maintenance costs of only $5,500 and salvage value after 6 years of $1,500. The marginal tax rate is 40%, and MARR is an after-tax 12%.
Determine which alternative is less costly, based upon comparison of after-tax annual worth.
Show the AW values used to make your decision.
In: Finance
The Titanic Shipbuilding Company has a noncancelable contract to build a small cargo vessel. Construction involves a cash outlay of $270,000 at the end of each of the next two years. At the end of the third year the company will receive payment of $620,000. Assume the IRR of this option exceeds the cost of capital. The company can speed up construction by working an extra shift. In this case there will be a cash outlay of $584,000 at the end of the first year followed by a cash payment of $620,000 at the end of the second year. Use the IRR rule to show the (approximate) range of opportunity costs of capital at which the company should work the extra shift. (Enter your answers as a percent rounded to 2 decimal places. Enter the smallest percent first.
In: Accounting
Logan Green decided to build an earth friendly home. He owned
the land, but had to seek financing to cover the cost of
construction. Conglomerate Mortgage Company offered him a
construction loan where no payments were made until one month after
the certificate of occupancy was issued. After that the loan would
convert to a standard 30 year fixed rate mortgage. Logan borrowed a
lump sum of $421500 at 4% per year compounded monthly. Logan
received his certificate of occupancy exactly 12 months after
taking out the loan. What are his monthly payments?
$
How much interest does he pay in the first full year of making
payments?
In: Accounting
MSK Construction Company contracted to construct a factory building for $525,000. Construction started during 2019 and was completed in 2020. Information relating to the contract follows:
| 2019 | 2020 | ||||||
| Costs incurred during the year | $ | 290,000 | $ | 150,000 | |||
| Estimated additional cost to complete | 145,000 | — | |||||
| Billings during the year | 260,000 | 265,000 | |||||
| Cash collections during the year | 240,000 | 285,000 | |||||
Required:
Record the preceding transactions in MSK’s books assuming it recognizes revenue over time and uses costs incurred to measure the extent to which its performance obligation has been satisfied.
Record the preceding transactions in MSK’s books assuming it recognizes revenue at a point in time when control of the completed factory is transferred to the customer at the end of the project.
In: Accounting
The state government of Perak has recently announced the
building of a suspension bridge between Pulau Pangkor and
Peninsular Malaysia. The construction cost of the bridge is
estimated at RM100 million and this 4-lane bridge will take
approximately 3 years to complete. This infrastructure project is
expected to encounter many technical challenges and require the
involvement of various parties, particularly engineers of different
disciplines and expertise. Predict engineering-related ethical
issues that may possibly occur during the construction of the
suspension bridge. Discuss on the root causes of each ethical issue
you have identified. Finally, propose the efforts that can be duly
taken by a professional engineer to prevent the ethical issues you
have mentioned.
(20 markah/marks)
In: Civil Engineering
A new cement mixing truck can be purchased for $100,000 and will have a salvage value of $50,000 at the end of 5 years. The cost of concrete mix for the truck is $100 per cubic yard. Alternatively, the construction company can pay $105 per cubic yard to have concrete delivered by a third party.
Assume the construction company can order the concrete mix or delivery for the whole year on their account, and pay the full balance at the end of each year. At an interest rate of 10% per year, the minimum cubic yards of concrete that must be used each year to justify the purchase of a truck is closest to:
The answer is C. Why?
I need an explanation.
In: Economics
Suppose that: (i) the construction industry is perfectly competitive; (ii) male and female construction workers are equally productive; and (iii) all male construction workers are prejudiced against female construction workers. In the equilibrium in the labor market for construction workers, one would expect:
Group of answer choices
Integrated work crews, and no gender wage gap disadvantaging women
Integrated work crews, but a gender wage gap disadvantaging women
Work crews that are segregated by sex, but no gender wage gap
Work crews that are segregated by sex, and a gender wage gap disadvantaging women
In: Economics
Propose an initial risk register for constructing a Recreational Park Project. The risk register should contain a minimum of 10 risks. * Use a template of your choice for risk register.
In: Operations Management
determine the beta for Starwood Hotel (HOT), Disney (DID), Abbott Laboratories (ABT), and Lockheed Martin (LMT). Discuss the possible reasons for the differences you observe among these companies.
In: Economics