Your firm specializes in the construction of short track speed
skating ice rinks. The popularity of this sport at the Winter
Olympics has resulted in lots of new business for your firm. To
meet this demand, you've decided to buy or lease a new Terex tower
crane for use over the next four years. You have two choices:
1)Buy the crane from Terex for $600,000 and sell it back to them in
48 months for $240,000.
2)Lease the crane from Terex for $11,000 per month for 48 months.
If you choose to lease the crane, they will make the first and last
payments on your behalf (so that you only have to make payments in
months 2 through 47).
Your opportunity cost of capital is 0.8% per month. Should you
lease or buy the new crane?
SHOW YOUR WORK, DO NOT USE EXCEl
In: Finance
During 2020, GR Engineering Company constructed a building for its own use at a total cost of $14,700,000.
The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $10,200,000. The company had the following debt outstanding at December 31, 2020: 1. 10%, 5-year note to finance construction of this building, dated January 1, 2020, with interest payable annually on January 1 $6,300,000 2. 12%, ten-year bonds issued at par on December 31, 2014, with interest payable annually on December 31 7,000,000 3. 9%, 4-year note payable, dated January 1, 2019, with interest payable annually on January 1 3,500,000 Compute the amounts of each of the following (show computations). 1. Avoidable interest 2. Actual interest 3. Total interest to be capitalized during 2020
In: Accounting
J&R Construction Company is an international conglomerate with a real estate division that owns the right to erect an office building on a parcel of land in downtown Sacramento over the next year. This building would cost $35 million to construct. Due to low demand for office space in the downtown area, such a building is worth approximately $32.5 million today. If demand increases, the building would be worth $38 million a year from today. If demand decreases, the same office building would be worth only $30 million in a year. The company can borrow and lend at the risk-free annual effective rate of 3.8 percent. A local competitor in the real estate business has recently offered $816,000 for the right to build an office building on the land. What is the value of the office building today? Use the two-state model to value the real option.
In: Finance
In: Civil Engineering
21.A good has many substitutes.
Inputs to production are scarce.
Firms' response to a price change is limited by the limited
capacity of their production facilities.
A good has many substitutes.
The firm is experiencing diminishing returns to a variable
input.
24. Suppose that the elasticity of demand for burgers is 2.5 and
price decreases by 14%. By what percentage will quantity demanded
for burgers increase?
2.5%
5.6%
25%
35%
30. Governments like to know the price elasticity of demand because
it helps them determine how changes in sales tax rates will
affect
Tax revenues.
Government spending
Income.
Profits
33. The perfectly competitive firm’s short-run supply curve is the part of the firm’s
Short-run average cost curve above the marginal cost.
Short-run marginal cost curve above the shut-down price.
Short-run average variable cost curve above the shut -down
price.
Short-run marginal cost curve above the break-even price.
34. When a firm is experiencing diminishing marginal returns
Average cost is increasing.
Average cost is decreasing.
Marginal costs are increasing.
Marginal costs are decreasing.
In: Economics
7. Product Cost Method of Product Costing
Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,620 cell phones are as follows:
| The Variable costs per unit are: | The Fixed costs are: | |||||||
| Direct materials | $61 | Factory overhead | $199,000 | |||||
| Direct labor | 30 | Selling and administrative expenses | 69,900 | |||||
| Factory overhead | 22 | |||||||
| Selling and administrative expenses | 22 | |||||||
| Total variable cost per unit | $135 | |||||||
Voice Com desires a profit equal to a 15% rate of return on invested assets of $598,200.
a. Determine the amount of desired profit from
the production and sale of 4,620 cell phones.
$
b. Determine the product cost per unit for the
production of 4,620 of cell phones. Round your answer to the
nearest whole dollar.
$ per unit
c. Determine the product cost markup percentage
for cell phones. Round your answer to two decimal places.
%
d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.
| Total Cost | $per unit |
| Markup | per unit |
| Selling price | $per unit |
In: Accounting
Product Cost Method of Product Costing
Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,320 cell phones are as follows:
| Variable costs per unit: | Fixed costs: | |||||||
| Direct materials | $76 | Factory overhead | $199,000 | |||||
| Direct labor | 30 | Selling and administrative expenses | 69,100 | |||||
| Factory overhead | 22 | |||||||
| Selling and administrative expenses | 18 | |||||||
| Total variable cost per unit | $146 | |||||||
Voice Com desires a profit equal to a 15% rate of return on invested assets of $601,500.
a. Determine the amount of desired profit from
the production and sale of 5,320 cell phones.
$
b. Determine the product cost per unit for the
production of 5,320 of cell phones. Round your answer to the
nearest whole dollar.
$ per unit
c. Determine the product cost markup percentage
for cell phones. Round your answer to two decimal places.
%
d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.
| Total Cost | $per unit |
| Markup | per unit |
| Selling price | $per unit |
In: Accounting
Product Cost Method of Product Costing
Voice Com, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,700 units of cell phones are as follows:
| Variable costs: | Fixed costs: | |||||||
| Direct materials | $74 | per unit | Factory overhead | $200,400 | ||||
| Direct labor | 31 | Selling and admin. exp. | 69,000 | |||||
| Factory overhead | 25 | |||||||
| Selling and admin. exp. | 21 | |||||||
| Total variable cost per unit | $151 | per unit | ||||||
Voice Com desires a profit equal to a 14% rate of return on invested assets of $599,500.
a. Determine the amount of desired profit from
the production and sale of 4,700 units of cell phones.
$
b. Determine the product cost per unit for the
production of 4,700 of cell phones. If required, round your answer
to nearest dollar.
$ per unit
c. Determine the product cost markup percentage
(rounded to two decimal places) for cell phones.
%
d. Determine the selling price of cell phones. Round to the nearest dollar.
| Cost | $per unit |
| Markup | $per unit |
| Selling price | $per unit |
In: Accounting
Product Cost Method of Product Costing
Voice Com, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,700 units of cell phones are as follows:
| Variable costs: | Fixed costs: | |||||||
| Direct materials | $74 | per unit | Factory overhead | $200,400 | ||||
| Direct labor | 31 | Selling and admin. exp. | 69,000 | |||||
| Factory overhead | 25 | |||||||
| Selling and admin. exp. | 21 | |||||||
| Total variable cost per unit | $151 | per unit | ||||||
Voice Com desires a profit equal to a 14% rate of return on invested assets of $599,500.
a. Determine the amount of desired profit from
the production and sale of 4,700 units of cell phones.
$ 83930
b. Determine the product cost per unit for the
production of 4,700 of cell phones. If required, round your answer
to nearest dollar.
$ 173 per unit
c. Determine the product cost markup percentage
(rounded to two decimal places) for cell phones.
%
d. Determine the selling price of cell phones. Round to the nearest dollar.
| Cost | $173 per unit |
| Markup | $per unit |
| Selling price | $per unit |
In: Accounting
Product Cost Method of Product Costing
Voice Com, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,700 units of cell phones are as follows:
| Variable costs: | Fixed costs: | |||||||
| Direct materials | $74 | per unit | Factory overhead | $200,400 | ||||
| Direct labor | 31 | Selling and admin. exp. | 69,000 | |||||
| Factory overhead | 25 | |||||||
| Selling and admin. exp. | 21 | |||||||
| Total variable cost per unit | $151 | per unit | ||||||
Voice Com desires a profit equal to a 14% rate of return on invested assets of $599,500.
a. Determine the amount of desired profit from
the production and sale of 4,700 units of cell phones.
$
b. Determine the product cost per unit for the
production of 4,700 of cell phones. If required, round your answer
to nearest dollar.
$ per unit
c. Determine the product cost markup percentage
(rounded to two decimal places) for cell phones.
%
d. Determine the selling price of cell phones. Round to the nearest dollar.
| Cost | $per unit |
| Markup | $per unit |
| Selling price | $per unit |
In: Accounting