Mountain Frost is considering a new project with an initial cost of $270,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $21,300, $22,200, $24,600, and $18,200, respectively. What is the average accounting return?

A) 14.65% B) 15.98% C) 7.99% D) 11.99% E) 17.12%

Suppose the optimization problem is to minimize the cost of production c = 3 x + 4 y subject to the constraint 2xy =337.5. Here the cost-minimizing amount of x is ?? , and y is ?? .

The Lagrange multiplier is ?? .

The second principal minor of Bordered Hessian is ?? .

The bordered Hessian matrix is??

Straight-Line Depreciation

A building acquired at the beginning of the year at a cost of $85,300 has an estimated residual value of $3,300 and an estimated useful life of 10 years. Determine the following:

What is the weighted average cost of capital (WACC)? Explain with examples.

and Why is it different from the rate of return to investors? Explain with examples.

Are surveillance cameras worth the cost in terms of resources and loss of privacy, given the role that they play in deterring or solving crimes? Explain your point of view

Notes:
answer by using your own words, please.
the name of the course is "Professional Computing Issues."

A delivery truck was acquired on January 1, 2017, at a cost of $65,000. The delivery truck was originally estimated to have a residual value of $5,000 and an estimated life of five years. The truck is expected to be driven a total of 200,000 kilometers during its life, distributed as:

Using the straight-line, units-of-production, and double-diminishing balance methods, answer the following questions.

1. The 2017 depreciation expense using the units-of-production method is:

2. The 2018 depreciation expense using the straight-line method is:

3. The 2018 depreciation expense using the double-diminishing balance method is:

4. The 2019 depreciation expense using the units-of-production method is:

5. The book value on December 31, 2018, using the straight-line method is:

6. The book value on December 31, 2018, using the double-diminishing balance method is:

7. Which method results in the lowest depreciation expense in the first two years?

8. Prepare the adjusting entry to record the 2020 depreciation expense based on the units-of- production method.

Heller is introducing a new product with sales of $10,000,000 per year and a Cost of Goods Sold (COGS) of $7,500,000 per year. They expect sale to grow at 5% per year for four years, then shrink at 30% per year for two years (7 years total), and then sales will stop. The 75% Cost of sales assumptions is expected to remain constant. The Heller Corporation has the following net operating working capital investment expectations for the beginning of each year of the project. At the end of the project the Net Operating Working Capital Investment will no longer be required.

Receivables: 46 days Next Year’s Sales

Inventory: 98 days COGS

Payables: 35 days COGS

(Net Operating Working Capital Analysis)

8. Calculate the annual cash flow required for the resulting Net Operating Working Capital investment. I recommend you complete this analysis in Excel.

9. If the Opportunity Cost of Capital is 9% what is the impact of the required Net Operating Working Capital Investment on the NPV of the project?

10. How much value (measured by the impact on NPV) could they create by reducing the Inventory they hold to 60 days assuming that sales are unchanged.

One of the variable production costs is the cost of steel. The standards for steel purchase prices and usage as set at the beginning of 2016 were:

Standard price of steel $25.00 per pound

Standard quantity of steel per car 100 pounds per car

Data on actual steel purchases for 2016 were:

Actual cost of steel purchased and used $28,700,000

Actual pounds of steel purchased and used 1,210,000 pounds

Recall that budgeted production for the year was 10,000 cars, while actual production was 11,000.

1. At the end of the year a cash bonus of 5% of performance above expectations is split among the members of the relevant departments. Performance above expectations is defined in terms of impact on total profits. What was the impact of the production department’s production activities on the company’s overall profits? What was the impact of the purchasing department’s activities on the company’s overall profits? Which department if any will receive a bonus? What size will that bonus pool be?

2. Are there any caveats in the performance evaluation mechanism used in question 1?

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $665,000. This cost will be depreciated straight-line to zero over the project’s 5-year life, at the end of which the sausage system can be scrapped for $87,000. The sausage system will save the firm $187,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $39,000. If the tax rate is 22 percent and the discount rate is 10 percent, what is the NPV of this project?

You are considering a project that will cost $50,000 to set up, and will pay out $18,000 1, 2, 3

and 4 years from today. The unlevered beta for this project is 1.2, the risk free rate is 6.5%, and

the expected return on the S&P 500 is 15%. Corporate taxes are 25%.

a.

What is the unlevered cost of equity for this project?

b. What is the NPV of this project if you finance with all equity?

c.

You are considering borrowing $30,000 to finance this project, with repayment in 4

years. You could normally borrow at 7.5%. The Nebraska state government has offered

to lend you the money at 6%. What is the adjusted present value of this project if you

take the subsidized loan?