The annualized cost of acquiring capacity for the new barracuda drives at Seagate is calculated as $25 per unit and the contibution margin for the product is $45 per unit.

a.) what service level(percentile of demand met) should seagate target for in building capacity? how much capacity will it build? the demand forcast for the barracuda drives is uniform between 100 and 200.

b.) how does this service level change, if Seagate outsources manufacturing to china, to arrive at an annualized cost of capacity of $10 per unit? How much capacity will it build?

c.) How does this service level change if the inbound shipment cost per unit from China to US reduces the margin per unit to $35? How much capacity will it build?

d.) Conduct the capacity calculations in all 3 scenarios above when the forcast for the barracuda drives is expected to follow the following distributions.

Problem 2             

                  Favor Company budgeted the following amounts:

Required:

Prepare a flexible budget for 1,500 units, 1,800 units and 2,100 units.

) The cash flows for four projects are shown below, along with the cost of capital for these projects. If these projects are mutually exclusive, which one should be taken? 28) A) Year: 0 1 2 3 4 5 Cash flow: -$20,000 $6000 $6000 $6000 $6000 $6000 Cost of Capital: 8.2% B) Year: 0 1 2 3 4 5 Cash flow: -$15,000 $4000 $4000 $4000 $4000 $4000 Cost of Capital: 7.0% C) Year: 0 1 2 3 4 5 Cash flow: -$18,000 $5000 $5000 $5000 $5000 $5000 Cost of Capital: 7.6% D) Year: 0 1 2 3 4 5 Cash flow: -$12,000 $4000 $4000 $4000 $4000 $4000 Cost of Capital: 5.0%

You are evaluating a capital project for equipment with a total installed cost of $750,000. The equipment has an estimated life of 30 years, with an expected salvage value at the end of the project of $50,000. The project will be depreciated via simplified straight-line depreciation method. In addition, a working capital investment of $5,000 is required. The project replaces an old piece of equipment which is currently in service and is fully depreciated, but has an expected after-tax salvage value of $12,000. After replacing the old equipment, cash savings from decreased operating expenses are expected to amount of $200,000 per year. The firm;s marginal tax rate is 40 percent and the project cost of capital is 10%. What is the net present value of this project? Round to the nearest penny. Do not include a dollar sign in your answer.

Cost of Units Completed and in Process

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process—Assembly Department

Bal., 2,000 units, 55% completed 7,980 To Finished Goods, 46,000 units ?

Direct materials, 47,000 units @ $1.9 89,300

Direct labor 136,500

Factory overhead 53,125

Bal. ? units, 45% completed ?

Cost per equivalent units of $1.90 for Direct Materials and $4.10 for Conversion Costs.

a. Based on the above data, determine the different costs listed below. If required, round your interim calculations to two decimal places.

1. Cost of beginning work in process inventory completed this period. $

2. Cost of units transferred to finished goods during the period. $

3. Cost of ending work in process inventory. $

4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent. $

b. Did the production costs change from the preceding period?

c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?

Discuss the uses of a process cost system and how it compares to a job order sytem. Can you provide examples of each?

The cash flow in respect of two projects is given below. The cost of capital is 8.5%.

Answer the following question using the above information.

I           What is the NPV of Project A? Should this project be accepted?

II         What is the NPV of Project B? Should this project be accepted? (Please state based on what the NPV for both questions I & II are accepted or rejected)

III        What is the Accounting rate of return (ARR) of Project A? Ans : 31.50%

IV        What is the Accounting rate of return (ARR) of Project B? Ans : 28.67%

V         What is the IRR of Project A? Use graphical and linear interpolation method. Ans : 17.67%

VI)      What is the IRR for Project B? Use graphical and linear interpolation method. Ans : 14.48%

VII)     What is the discounted payback period for Project A and B? Ans : A : 4 years, B:5 years

Please state all the workings clearly, pls do not answer in excel. Pls answer all manually with proper explanation and provide every formulae clearly. Tq

The mean cost of a meal for two in a mid-range restaurant in Tokyo is $40 (Numbeo.com website, December 14, 2014). How do prices for comparable meals in Hong Kong compare? The DATAfile HongKongMeals contains the costs for a sample of 42 recent meals for two in Hong Kong mid-range restaurants. Click on the datafile logo to reference the data.

5. A machine was acquired on January 1, 2018, at a cost of $80,000. The machine was originally estimated to have a residual value of $5,000 and an estimated life of 5 years. The machine is expected to produce a total of 100,000 components during its life, as follows: 15,000 in 2018, 20,000 in 2019, 20,000 in 2020, 30,000 in 2021, and 15,000 in 2022.

Instructions

(a)   Calculate the amount of depreciation to be charged each year, using each of the following methods :

       1.    Straight-line method

       2.    Units-of-production

       3.    Double diminishing-balance

(b)        Which method results in the highest depreciation expense during the first two years? Over all five years?

Company issues bonds at a price of $925 and a flotation cost of 1%.

The bond has an annual coupon rate of 5% and a maturity of 10 years.

The corporate tax rate is 40%.

Common stock sells at $30 per share and new issues would have a flotation cost of $2.

The last dividend paid was $3 per share and the growth rate of dividends is 6%.

Your firm’s capital structure is 20% debt, 20% retained earnings, and 60% common stock.

1. Compute the after-tax cost of debt
2. Compute the cost of common stock
3. Compute the cost of retained earnings
4. Compute the Weighted Average Cost of Capital