"A firm is undertaking a project with the following details provided.

- The project costs $2.5 million and has a 7-year service life.

- It generates revenues of $560,000 annually.

- The project is classified as a 7-year property under the MACRS rule.
- At the end of year 7, any assets for the project will be sold. The expected salvage will be 18% of the initial $2.5M project cost.

- The firm will finance 40% of the project money from an outside source with an interest rate of 12%. The firm is required to repay the loan with 5 equal annual payments.

- The firm's tax rate is 21%.

- MARR is 16%.

Given this information, compute the IRR for this project. Enter your answer as percentage rounded to the nearest tenth of a percent (i.e., 8.3% is entered as 8.3)."

Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment is as follows

Initial investment (2 limos) $960,000

Useful life 10 years

Salvage value $120,000

Annual net income generated $82,560

LLT's cost of capital 13%

Assume straight line depreciation method is used. Required Help LLT evaluate this project by calculating each of the following:

1. Accounting rate of return. (Round your percentage answer to 1 decimal place.)

2. Payback period. (Round your answer to 2 decimal places.)

3.Net present value.

I require answer for all the 3 questions. Thank you

Create a Balance Sheet using the following data:
               
Sales   $55,000           Accumulated Depreciation   19,000            
Cost of good sold   32,000           Accounts Receivable    7,300           
Depreciation Expense   3,800           Accounts Payable   6,500           
Interest Expense   2,600           Short-term notes payable   2,600           
Income taxes   5,985             Marketing, general and admin expenses   4,500  

Inventories   4,700           Gross fixed assets   64,800           
Long-term debt   36,000           Common stock   12,000           

Other assets   1,500           Retained earnings   13,850  

Cash   ?               
Include two columns Percentage of Total assets and Dollar Value.              
Also firm has paid $1,500 in common stock dividends during the year and has 1000 shares outstanding .

1. you want to buy your dream car which will cost you $5900. If you could invest your entire savings of $3500 at an annual interest of 12%, how long (in years rounded to two decimal places) would you have to wait until you have accumulated enough money to buy the car? answer

2. You want to buy a house in 9 years and expect to need $25000 for a down payment. If you have $14000 to invest, how much interest do you have to earn (compounded annually) to reach your goal? (Enter your answers as a decimal rounded to 4 decimal places, not a percentage. For example, enter 0.0843 instead of 8.43%)

Valmont Company has developed a new industrial piece of equipment called the XP-200. The company is considering two methods of establishing a selling price for the XP-200—absorption cost-plus pricing and value-based pricing.

Valmont’s cost accounting system reports an absorption unit product cost for XP-200 of $9,200. Its markup percentage on absorption cost is 85%. The company’s marketing managers have expressed concerns about the use of absorption cost-plus pricing because it seems to overlook the fact that the XP-200 offers superior performance relative to the comparable piece of equipment sold by Valmont’s primary competitor. More specifically, the XP-200 can be used for 17,000 hours before replacement. It only requires $1,800 of preventive maintenance during its useful life and it consumes $160 of electricity per 850 hours used.

These figures compare favorably to the competing piece of equipment that sells for $17,000, needs to be replaced after 8,500 hours of use, requires $3,600 of preventive maintenance during its useful life, and consumes $188 of electricity per 850 hours used.

Required:

1. If Valmont uses absorption cost-plus pricing, what price will it establish for the XP-200?

2. What is XP-200’s economic value to the customer (EVC) over its 17,000-hour life?

3. If Valmont uses value-based pricing, what range of possible prices should it consider when setting a price for the XP-200?

Accounting 122 Group Project 2

Cascade Company estimated the following variable and fixed cost for the only product it produces:

Prepare an estimated Contribution Margin Income Statement for the year ended December 31, 2018. (6,000 units are to be produced and sold). Assume the estimated sales price will be $500 per unit. Include one category for variable cost and one category for fixed cost.

Compute the break-even point in units and sales dollars

Compute the break-even point in units and sales dollars assuming the changed facts below:

The sales staff will now handle all of the advertising cost and their sales commission will be increased to 10% of every sales dollar. Remember, the sales price per unit is $500.

The sales staff will also have their fixed salaries decrease by $100,000.

All other facts will remain unchanged.

Which alternative would you select assuming that Cascade will sell at least 5,000 units? Why?

Referring to the original facts; what is the sales in units and sales dollars required to generate a 12% Operating Income as a percentage of Sales?

Cascade Company estimated the following variable and fixed cost for the only product it produces:

1) Prepare an estimated Contribution Margin Income Statement for the year ended December 31, 2018. (6,000 units are to be produced and sold). Assume the estimated sales price will be $500 per unit. Include one category for variable cost and one category for fixed cost.

2) Compute the break-even point in units and sales dollars

3) Compute the break-even point in units and sales dollars assuming the changed facts below:

(The sales staff will now handle all of the advertising cost and their sales commission will be increased to 10% of every sales dollar. Remember, the sales price per unit is $500.

The sales staff will also have their fixed salaries decrease by $100,000.

All other facts will remain unchanged.)

4) Which alternative would you select assuming that Cascade will sell at least 5,000 units? Why?

5) Referring to the original facts; what is the sales in units and sales dollars required to generate a 12% Operating Income as a percentage of Sales?

Accessory World makes floor mats for the automobile industry. Finished sets of mats must pass through two departments: Cutting and Coating. Large sheets of synthetic material are cut to size in the Cutting Department and then transferred to the Coating Department, where each set is sprayed with a chemical coating for improved durability. The following information pertains to May activity in the Cutting department:

Cost data:

Total cost of beginning inventory on May 1 . . . . . . . . . . . .. . . . . . . . . . . $ 44,800

Direct materials costs incurred in May . . . . . . . . . . . . . . . . . . . . . . . . . . .   200,000

Conversion costs incurred in May   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     87,200

Physical units data:

Units in process, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .       8,000 sets

Units started in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     50,000 sets

Units in process, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .     10,000 sets

Percentage of completion data:

Direct materials, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          100%

Conversion, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            80

Direct materials, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          100%

Conversion, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            20

1. Prepare a schedule showing: (1) the number of mat sets transferred from the Cutting Department to the Coating Department in May, and (2) the number of mat sets started and completed by the Cutting Department in May.

2. Compute the equivalent units of input resources for the Cutting Department in May.

3. Compute the cost per equivalent unit of input resource for the Cutting Department in May.

4. Determine the total cost transferred out and prepare the summary journal entry required to transfer the cost of completed mat sets from the Cutting Department to the Coating Department in May.

5. Compute the total cost assigned to the Cutting Department’s ending inventory on May 31.

Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.

Total estimated overhead costs are $ 297,000. Overhead cost allocated to the machining activity cost pool is $ 189,000, and $ 108,000 is allocated to the machine setup activity cost pool.

Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 12.25.)

eTextbook and Media

Compute the overhead rates using the activity-based costing approach.

eTextbook and Media

Determine the difference in allocation between the two approaches.

I need to Prepare entries for a job order, cost system, and cost of goods manufactured schedule, but my numbers aren't matching up. Please answer both parts of the question.

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017, the general ledger for Case Inc. contains the following data.