If KFC purchases the new unit, annual sales revenues are expected to increase by $100,000 before-tax (due to increased processing capacity), and annual operating costs (exclusive of depreciation) are expected to remain constant at this new level over the five-year life of the project. After five years, the new unit will be completely depreciated and is expected to be sold for $70,000 before-tax.
A. (12 points) What is the initial outlay associated with this
project?
B. (6 points) What is the operating cash flow per year?
C. (8 points) What is the terminal cash flow?
D. (4 points) Should this machine be replaced? Support your argument with NPV.
In: Finance
Glass Product Limited (GPL) is a manufacturer specializing in glass products . The company has been in operation for ten years and during that time has built up a loyal and expanding customer base.GPL Limited has three signature lines, Trophies, Glasses and Mirrors all produced from Italian imported sand.. Successful marketing and sales of these products has resulted in the company exceeding full capacity at its current manufacturing base in Habour Road. Consequently, the directors are considering expanding production capacity over the next few years and are examining a number of possibilities. However, for the current year the company has a total of 15,000 Furnace hours and 4,000 direct labour hours available for production at its Harbour Road manufacturing base. Production and sales details relating to the signature Products are shown below:
Trophies Glasses
Mirrors
Direct material (linen) @$20 per meter 1.5
m 1.25 m 2.5 m
Direct labor@ $16 per hour 0.5 hrs. 0.25
hrs 0.75 hrs
Variable overhead @ 125% of direct labor cost
Furnace hours required 3 hrs 2
hrs 2.5 hrs
Sales demand units (annual) 3,500
1,400 1,800
Selling price per unit $ 60.00
$90.00 $125.00
Additional Information
Budgeted fixed manufacturing overheads per month $ 100,200
Budgeted selling and administrative cost per month $46,500
Required.
1. Based on the information provided, state whether
GPL has sufficient production capacity to satisfy sales demand for
the coming year. (provide computations)
2. Compute the optimal production plan for GPL for the
current year, clearly showing total profit expected.
In: Accounting
1) The Australian Ministry of Education recently required that high schools must hire five additional teachers with Master’s degrees in Mathematics.
a. It will take a few months to initiate the hiring process. Discuss the immediate effect on the salaries of teachers with Master’s degrees in Mathematics? Illustrate graphically the effects on the market for Master’s degree mathematic teachers in the short-run.
b. What will be the effect after five years? Discuss and illustrate graphically the effects on the market for Master’s degree mathematic teachers in the long-run. How does the salary in the long-run compare to the short-run and why?
c. Discuss the differences between the short-run and long-run elasticities of supply.
2) Suppose Fred is only willing to buy a bike seat if he can also buy a bike seat cover to go with it, i.e. Fred needs an equal number of bike seats and bike seat covers. Fred has $100 in income.
a. Suppose bike seat covers cost $1 and bike seats cost $19. How many of each will Fred buy? Discuss and illustrate graphically.
b. Suppose the price of bike seats increases to $49. How will Fred react to the price change? Discuss and illustrate on the same graph as in part a.
3) Suppose John consumes pedal bikes and e-bikes. The price increases for pedal bikes and John continues to purchase the same quantity as before the price increase. Illustrate graphically the price-consumption curve and pedal bike demand curve on two separate graphs given this information. Discuss the directions and magnitudes of the income and substitution effects. Are pedal bikes normal or inferior for John? Explain.
4) Jim realizes that if he employs an additional bike builder, then he will be able to increase the number of bikes built in his bike shop by 15 bikes per day. The daily salary he will need to pay the bike builder is $200. How much is the cost for an additional bike? Describe the general relationship between the marginal product and marginal cost curves.
5) The NRG Arena in Houston faces a downward sloping demand curve for tickets to football games and the stadium has a fixed number of seats available. Assume the marginal cost of filling a seat is zero. Why might the NRG Arena decide not to sell out every football game even though the marginal cost of selling additional seats is virtually zero? Discuss and illustrate graphically
In: Economics
Please provide a step by step solution
Key the names in indexing order using the ARMA rules. In the upper right corner of each card, key the corresponding number for each name
In: Operations Management
1) Donald rents out his vacation home for nine months and lives in his vacation home for the remainder of the year. His gross rental income for 2017 is $7,200. The expenses attributable to the vacation home for the entire year are as follows:
Real estate taxes $2,000
INterest on mortgage loan 4,000
Utilities 1,200
Repairs/maintenance 600
Depreciation 3,500
What amount would Donald report as net income or loss from the rental of the vacation home?
2) Wilson and Joan, both in their 30s, file a joint income tax return for 2017. Wilson's wages are $15,000 and Joan's wages are $23,000 for the year. Their total adjusted gross income is $38,000, and Joan is covered by a qualified pension plan at work but Wilson is not.
a) What is the maximum amount that Wilson and Joan may each deduct for contributions to thier individual retirement accounts?
Wilson $
Joan $
b) If Joan's wages are $82,000 for 2017, instead of $23,000, and thier adjusted gross income is $97,000, what is the maximum amount that Wilson and Joan may each deduct for contributions to thier individual retirement accounts?
Wilson $
Joan $
3) Hope srpings, a teacher, loaned Hugh Owens, a friend, $20,000 to invest in real estate. Hugh declared bankruptcy in 2017 and cannot repay the $20,000
a) What is the nature of Hope's loss? ( what does it called ?)
b) Assuming Hope has no other captial transactions, is there a limit on the amount she may deduct for 2017?
Explain
4) Dennis, the owner of Dennis Company, incurs the following expenses while away from home on a three-week business trip during 2017:
Air fare from Chicago to Boston $800
Hotel charges 2,200
Meal charges 880
Dry cleaning and laundry 100
Local transportation 55
Business entertainment 250
Business gift to Boston manager 55
in addition to the above expenses, Dennis incurred the following expenses for a weekend sightseeing trip to Washington D.C.:
Transportation to Washington DC $350
Hotel charges 225
Meal charges 105
Calcuate the amount Dennis may deduct for 2017 as travel expenses for the trip
In: Accounting
Henry Baer, below, with his mother, Violet Cunningham. Baer, 39, died from an antibiotic-resistant staph infection after his bloodline had become disconnected during a dialysis treatment. (Photo courtesy of Karen Gable) Henry Baer went in for his third dialysis treatment on New Year's Eve day in 2005. It turned out to be his last. He was only 39, but years of diabetes and high blood pressure had caused Baer's kidneys to shut down. Built-up waste and fluid were causing his limbs to swell and making him short of breath. He was sent for what's called in-center hemodialysis, the most common type of dialysis, at a beige-toned clinic near his home in Prescott Valley, Ariz. His first two sessions were pretty normal. A patient-care technician hooked Baer to a machine the size of a filing cabinet, connecting it with plastic tubing to the catheter in his chest. He sat in a lounge chair, still as stone, for about four hours as the machine, whirring gently, moved his blood through a specialized filter, then returned it, cleansed of toxins. It was uncomfortable and boring. "Sis, this isn't for me," he told his older sister, Karen Gable, vowing to make himself a viable candidate for a kidney transplant. Just over two hours into his next session, Baer's incoming bloodline "became disconnected," a federal inspection report says. The attending technician panicked, "yelling and screaming hysterically." Blood sprayed onto Baer's shirt, pants, arms and hands. Then, "contrary to emergency standing orders," the report continued, she reconnected the line to Baer's catheter, infusing him with "potentially contaminated blood." By the time Mike Wright, Baer's boss at a local car dealership, picked Baer up after the treatment, he was complaining of nausea. Over the next two days, Baer spiked a fever. His wife found him in bed, having a convulsion. He was taken to the hospital, where tests later showed that his catheter had become infected with antibiotic-resistant staph. The infection moved swiftly to his heart and brain. He died a few days later, on Jan. 7, 2006, leaving behind a 2-month-old daughter.
Questions: 1. What is venous needle dislodgement (VND)?
2. What causes VND?
3. What are the consequences of VND?
4. What are the risk factors for VND?
5. How do you prevent VND?
In: Nursing
Over the past several years, decommissioned U.S. warships have been turned into artificial reefs in the ocean by towing them out to sea and sinking them. The thinking was that sinking the ship would conveniently dispose of it while providing an artificial reef environment for aquatic life. In reality, some of the sunken ships have released toxins into the ocean and have been costly to decontaminate. In the late 1990s, at least two international conventions have made it all but impossible to export used warships for salvage without removing all military equipment, conducting a complete cleanup and cutting the ship into such comparatively small pieces as to make the entire exercise relatively expensive.
The new environmental regulations have made disposal of ships an expensive project. The United States has hundreds of mothballed warships, presenting an extremely expensive problem for military authorities and the government. Now the U.S. government is taking bids to instead dismantle and recycle ships that have recently been decommissioned (but have not been sunk yet.)
Assume that a recently decommissioned aircraft carrier, the USS Blaze, is estimated to contain 40 tons of recyclable materials able to be sold for approximately $32.8 million. About 90% of the value in old ships is the metals, including steel, copper, copper alloys, and lead that can be removed, sold for remelting, and reformed into new metal products. There are also some high-value metals; such as, nickel alloys, stainless steel, and titanium that can be found in some parts of all warships but may be present is such small quantities that recovery and resale may not be cost effective. The low bid for dismantling and transporting the ship materials to appropriate facilities is $34.5 million. Recycling and dismantling the ship would create about 500 jobs for about a year on the West Coast area. This geographic area has been experiencing record-high unemployment rates in recent years.
As an alternative, reefing these ships would create new habitats for underwater life and can be done using newer environmentally safe methods. These new artificial reefs would enhance fishery resources and facilitate the access and utilization by recreational and commercial fishermen. Artificial reefs can also increase tourism by attracting sport divers for recreational purposes. Academic organizations may be interested in using the site to study fish and other marine life which may open the door for more funding from these research activities. Research has shown that a new reef will attract 60,000 – 70,000 divers and add more than 10 million to the local tourism industry. Research has also shown that artificial reefs can substantially increase the population of reef-associated species. Within months the G. B. Church artificial reef in British Columbia had hundreds of encrusted individuals on its hull and within 2.5 years had seen an increase of nearly 100 species.
Reefing the ship would cost an estimated 800K (or $0.8 million) which includes cleaning of the vessel of toxics, oils and greases, PCB containing electrical and electronic equipment and other readily removable PCB containing equipment, local towing and docking, preparation (unspecified) and other incidental overhead items, insurance, and making the vessels safe for divers (diverizing). There will also be yearly maintenance costs in perpetuity.
Is it more financially advantageous to sink the ship or to dismantle and recycle it? Show your calculations. (Worth 4 pts.)
In: Accounting
In: Finance
Define the following: fixed cost, variable cost, marginal cost and marginal revenue
In: Economics
Why are the terms direct cost and indirect cost independent of the terms fixed cost and variable cost? Give an example to illustrate.
In: Accounting