Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company’s present selling price is $90 per unit, and variable expenses are $60 per unit. Fixed expenses are $838,800 per year. The present annual sales volume (at the $90 selling price) is 25,300 units.

Required:

1. What is the present yearly net operating income or loss?

2. What is the present break-even point in unit sales and in dollar sales?

3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?

4. What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)?

Brewer 8e Rechecks 2019-08-29

A forklift will last for only 4 more years. It costs $6,100 a year to maintain. For $16,000 you can buy a new lift that can last for 9 years and should require maintenance costs of only $3,100 a year. a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 6% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2. Should you replace the forklift? b-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 14% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Should you replace the forklift?

Problem Set 8

Delta Corporation has the following capital structure:

Calculate the weighted average cost of capital (WACC) and use it for the cost of capital interest rate for the rest of this problem. In other words, the WACC becomes the discount rate for the net present value calculations.

Assume Delta has three different (mutually exclusive) projects that are being considered. Listed below are the cash flows for the projects.

For each of the projects shown above, calculate the Payback Period, Internal Rate of Return (IRR), and Net Present Value (NPV). Make a table in APA format and label it Table 1. In this table show the three projects and the values for payback period, IRR, and NPV. Write a one paragraph explanation of which projects Delta management should choose and why. Explain whether the different calculation methods give you different results on which project(s) should be chosen and why.

*List for years 0-5 for the payback period, IRR and the NPV, Label each clearly.

A) Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 50,000 shares of Silva Company directly from one of the founders for a price of $46 per share. Silva has 200,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $135,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $459,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1

b. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
$

Balance Sheet Presentation of Available-for-Sale Investments

During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows:

B) Assume that as of December 31, Year 1, the Hawking Inc., stock had a market value of $44 per share and the Pavlov Co. stock had a market value of $34 per share. Galileo Company had net income of $176,000, and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets.

a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments.

b. Prepare the Stockholders' Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.

During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows:

* $3 per unit variable; $254,000 fixed each year.

The company’s $34 unit product cost is computed as follows:

Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings.

Production and cost data for the first two years of operations are:

Required:

1. Using variable costing, what is the unit product cost for both years?

2. What is the variable costing net operating income in Year 1 and in Year 2?

3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

Using variable costing, what is the unit product cost for both years?

What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus sign.)

Reconcile the absorption costing and the variable costing net operating income figures for each year.

1.Sasha owns two investments, A and B, that have a combined total value of 45,500 dollars. Investment A is expected to pay 20,500 dollars in 1 year(s) from today and has an expected return of 12.95 percent per year. Investment B is expected to pay 44,425 dollars in T years from today and has an expected return of 9.22 percent per year. What is T, the number of years from today that investment B is expected to pay 44,425 dollars? Round your answer to 2 decimal places (for example, 2.89, 14.70, or 6.00).

2.2 year(s) ago, Mack invested 6,570 dollars. In 2 year(s) from today, he expects to have 8,380 dollars. If Mack expects to earn the same annual return after 2 year(s) from today as the annual rate implied from the past and expected values given in the problem, then how much does Mack expect to have in 7 years from today?

3.3 year(s) ago, Xavier had 255,400 dollars in his account. In 6 year(s), he expects to have 411,900 dollars. If he has earned and expects to earn the same return each year from 3 year(s) ago to 6 year(s) from today, then how much does he expect to have in 2 year(s) from today?

4.

3 year(s) ago, Fatima invested 5,640 dollars. In 2 year(s) from today, she expects to have 7,720 dollars. If Fatima expects to earn the same annual return after 2 year(s) from today as the annual rate implied from the past and expected values given in the problem, then in how many years from today does she expect to have exactly 10,610 dollars? Round your answer to 2 decimal places (for example, 2.89, 14.70, or 6.00).

During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows:

* $3 per unit variable; $246,000 fixed each year.

The company’s $41 unit product cost is computed as follows:

Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings.

Production and cost data for the first two years of operatons are:

Required:

1. Using variable costing, what is the unit product cost for both years?

2. What is the variable costing net operating income in Year 1 and in Year 2?

3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

req 1

Using variable costing, what is the unit product cost for both years?

req 2

What is the variable costing net operating income in Year 1 and in Year 2?

req 3

Reconcile the absorption costing and the variable costing net operating income figures for each year. (Enter any losses or deductions as a negative value.)

On April 1, 2024, Titan Corporation purchases office equipment for $50,000. For tax reporting, the company uses MACRS and classifies the equipment as 5-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value.

Required:

1. Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes.
2. Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes.
3. In which year(s) is tax depreciation greater than financial reporting depreciation?

• Required 1
• Required 2
• Required 3

Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. (Round "Depreciation Rate per MACRS" answers to 2 decimal places. Round your final answers to nearest whole dollars. Leave no cell blank. Ensure to enter zero wherever applicable.)

• Required 2
• Required 3

Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes.

In which year(s) is tax depreciation greater than financial reporting depreciation?

During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows:

* $3 per unit variable; $253,000 fixed each year.

The company’s $36 unit product cost is computed as follows:

Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings.

Production and cost data for the first two years of operatons are:

Required:

1. Using variable costing, what is the unit product cost for both years?

2. What is the variable costing net operating income in Year 1 and in Year 2?

3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

Using variable costing, what is the unit product cost for both years?

What is the variable costing net operating income in Year 1 and in Year 2?

Reconcile the absorption costing and the variable costing net operating income figures for each year. (Enter any losses or deductions as a negative value.)

Below is a sample of 12 flights with their domestic airfares shown for both years. Current year 378,351,249,588,525,294. Previous year 549,447,522,684,309,390. Current year 468,333,513,600,468,669. Previous year 573,348,564,399,255,363. a. Formulate the hypotheses and test for a significant increase in the mean domestic airfare for business travel for the one-year period. (less than, greater than, less or equal, greater or equal etc...) t value? (3 decimals degrees of freedom? p-value? Using a .05 level of significance, what is your conclusion? b. What is the sample mean domestic airfare for business travel for each year? current year___? 2 decimals previous year___? 2 decimals c. What is the percentage change in the airfare for the one-year period?