Assume that a firm is considering building a factory that will cost $5 million. It believes that it can get a profit from this factory of $600,000 per year for many years. The interest rate at which the firm can borrow money is 15 percent. After evaluating whether it should build the factory, the firm decides that it should
Select one:
a. build
b. not build
In: Economics
Kerfuffle Corporation is considering the purchase of a new computer system. The cost for the new system, including set-up and delivery costs of $20,000, will be $2 million. The new system will provide annual before-tax cost savings of $650,000 for the next five years. The increased efficiency of the new system will lower net working capital by $150,000 today. The CCA rate on the new system will be 30%. At the end of five years, the system can be salvaged for $125,000. The firm’s required rate of return is 15%, and its marginal tax rate is 35%. What is the NPV of this cost-cutting project?
Select one: a. –$24,412.99 b. –$22,882.55 c. $50,258.43 d. $62,147.09 e. $63,385.37
In: Finance
Watkins Technology is purchasing computer software at a cost of $23,000. They are putting a down payment of $3,000 and will borrow the remainder. They will amortize the loan for the software in equal 48 monthly installments at an interest rate of 14%. Prepare an amortization schedule for the first two payments. SHOW ALL WORK!
|
Payment Number |
Amount of Payment |
Interest for Period |
Portion to Principal |
Principal Balance at End of Period |
|
0 |
||||
|
1 |
||||
|
2 |
In: Finance
In: Accounting
Schedule of Cost of Goods Manufactured and Sold
The following amounts are available for 2016 for Bourne
Manufacturing Company:
| Administrative salaries (non-factory) | $210,000 |
| Administrative rent (non-factory) | 105,000 |
| Advertising and promotion expense | 123,000 |
| Depreciation-administrative | 66,000 |
| Depreciation-factory | 90,000 |
| Depreciation-selling | 51,000 |
| Direct labor | 525,000 |
| Factory rent | 54,000 |
| Factory supplies used | 36,000 |
| Finished goods inventory (January 1) | 171,000 |
| Finished goods inventory (December 31) | 156,000 |
| Indirect material used | 42,000 |
| Indirect labor | 57,000 |
| Materials inventory (January 1) | 39,000 |
| Materials inventory (December 31) | 60,000 |
| Net delivered cost of materials purchased | 414,000 |
| Other factory overhead | 78,000 |
| Sales | 2,535,000 |
| Sales salaries expense | 216,000 |
| Work in process inventory (January 1) | 54,000 |
| Work in process inventory (December 31) | 93,000 |
Using the above data, prepare a schedule of cost of goods
manufactured and sold.
Do not use negative signs with any of your answers.
| Bourne
Manufacturing Company Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31,2016 |
|||
|---|---|---|---|
| Direct material: | |||
| Beginning materials inventory | $Answer | ||
| AnswerCost of materials purchasedEnding materials inventoryIndirect materials usedBeginning work in process inventoryEnding work in process inventoryBeginning finished goods inventoryEnding finished goods inventory | Answer | ||
| Cost of material available | Answer | ||
| Less: | AnswerCost of materials purchasedEnding materials inventoryIndirect materials usedBeginning work in process inventoryEnding work in process inventoryBeginning finished goods inventoryEnding finished goods inventory | Answer | |
| Total materials used | Answer | ||
| Less: | AnswerCost of materials purchasedEnding materials inventoryIndirect materials usedBeginning work in process inventoryEnding work in process inventoryBeginning finished goods inventoryEnding finished goods inventory | Answer | |
| Direct material used | $Answer | ||
| Direct labor | Answer | ||
| Manufacturing overhead | |||
| Indirect material | Answer | ||
| Indirect labor | Answer | ||
| Factory supplies used | Answer | ||
| Factory depreciation | Answer | ||
| Factory rent | Answer | ||
| AnswerCost of materials purchasedEnding materials inventoryIndirect materials usedBeginning work in process inventoryEnding work in process inventoryBeginning finished goods inventoryEnding finished goods inventoryOther factory overhead | Answer | ||
| Total manufacturing overhead | Answer | ||
| Total manufacturing costs for the year | Answer | ||
| Add: | AnswerCost of materials purchasedEnding materials inventoryIndirect materials usedBeginning work in process inventoryEnding work in process inventoryBeginning finished goods inventoryEnding finished goods inventoryOther factory overhead | Answer | |
| Total cost of work in process during the year | Answer | ||
| Less: | AnswerCost of materials purchasedEnding materials inventoryIndirect materials usedBeginning work in process inventoryEnding work in process inventoryBeginning finished goods inventoryEnding finished goods inventoryOther factory overhead | Answer | |
| Cost of goods manufactured | Answer | ||
| Add: | AnswerCost of materials purchasedEnding materials inventoryIndirect materials usedBeginning work in process inventoryEnding work in process inventoryBeginning finished goods inventoryEnding finished goods inventoryOther factory overhead | Answer | |
| Cost of goods available for sale | Answer | ||
| Less: | AnswerCost of materials purchasedEnding materials inventoryIndirect materials usedBeginning work in process inventoryEnding work in process inventoryBeginning finished goods inventoryEnding finished goods inventoryOther factory overhead | Answer | |
| Cost of goods sold | $Answer | ||
In: Accounting
The assignment is to prepare an accrual basis report of sales along with detailing the cost of goods sold.
SPC Flash Drive Company
September Report
|
Net Sales: |
$ |
|
Minus cost of goods sold: |
|
|
Beginning inventory |
$ |
|
Add purchases |
$ . |
|
Goods available for sale |
$ |
|
Subtract ending inventory |
$ |
|
Cost of goods sold |
$ . |
|
Net Income (Gross Profit) |
$ |
Case Study Specific
In September, the SPC Flash Drive Company had the following transactions relating to sales and cost of goods sold:
In: Finance
A store will give you a 4.25% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing rate being paid by customers who choose to defer payment for the month? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Effective Annual Rate =
In: Finance
The SAI Inc. is planning to set up a new store. The startup cost of the store is $650,000. The store will increase revenue by $270,000 each year for the next six years and all costs including costs of merchandise, labor, utilities, and taxes are $130,000 per year. The store will require upgrade to the store front every two years at a cost of $35,000 each time. At the end of the six years, the store inventory will be sold off at a super sale to receive $10,000 after taxes and the company will cease operations. The company’s cost of capital is 4.5 percent. The level of risk of the product sales is the same as the overall risk for the company.
What is the NPV of the new store decision?
| A. |
-$8,495 |
|
| B. |
$10,702 |
|
| C. |
$17,572 |
|
| D. |
-$ 5,428 |
|
| E. |
$16,598 |
|
| F. |
$18,381 |
In: Finance
Your manager is proposing a new investment. If the company pursues the investment, it will cost $300,000 today. It has an expected life of 10 years and no salvage value. Annual expenses are estimated to be $30,000 per year. Annual revenue increases are estimated to be $70,000 per year. Your company must borrow 1/3 of the investment cost. The bank has agreed to six equal annual payments, with the first payment due at the end of year 1. The company's MARR is 10% compounded annually. The loan interest rate is 12% compounded annually.
create in excel file
a) How much is the loan payment?
b) What is the present worth of this investment opportunity?
c) Based on the present worth analysis, should the company make the investment? Why or why not?
In: Economics
Productivity is a key factor in the cost of goods and services. Increases in productivity can become a competitive advantage. Select two retailers (e.g., Verizon and AT&T) or a certain product (e.g., cell phones) and state different ways they compete. Discuss ways a company can gain a competitive advantage by having higher productivity than its competitors have. Add how monopolies compare and give real-life examples.
In: Operations Management