Problem 7-18 Abandonment

We are examining a new project. We expect to sell 6,700 units per year at $61 net cash flow apiece for the next 10 years. In other words, the annual operating cash flow is projected to be $61 × 6,700 = $408,700. The relevant discount rate is 15 percent, and the initial investment required is $1,780,000. After the first year, the project can be dismantled and sold for $1,650,000. Suppose you think it is likely that expected sales will be revised upward to 9,700 units if the first year is a success and revised downward to 5,300 units if the first year is not a success.

a. If success and failure are equally likely, what is the NPV of the project? Consider the possibility of abandonment in answering. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

b. What is the value of the option to abandon? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Give one example to non-regularity on any programming language that you know. Your should provide an example to each one of the following categories: Generality, Orthogonality, and Uniformity. That is, you will give total three examples and explain why...

The Gilbert Instrument Corporation is considering replacing the wood steamer it currently uses to shape guitar sides. The steamer has 6 years of remaining life. If kept, the steamer will have depreciation expenses of $650 for 5 years and $325 for the sixth year. Its current book value is $3,575, and it can be sold on an Internet auction site for $4,150 at this time. If the old steamer is not replaced, it can be sold for $800 at the end of its useful life.

Gilbert is considering purchasing the Side Steamer 3000, a higher-end steamer, which costs $12,000, and has an estimated useful life of 6 years with an estimated salvage value of $1,200. This steamer falls into the MACRS 5-years class, so the applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The new steamer is faster and would allow for an output expansion, so sales would rise by $2,000 per year; even so, the new machine's much greater efficiency would reduce operating expenses by $1,500 per year. To support the greater sales, the new machine would require that inventories increase by $2,900, but accounts payable would simultaneously increase by $700. Gilbert's marginal federal-plus-state tax rate is 40%, and its WACC is 14%.

Should it replace the old steamer?

The old steamer _________shouldshould not be replaced.

What is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest dollar.

$  

Should it replace the old steamer?

The old steamer be replaced.

What is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest dollar.

$  

First determine the net cash flow at t = 0:

^aThe market value is $4,150 – $3,575 = $575 above the book value. Thus, there is a $575 recapture of depreciation, and Gilbert would have to pay 0.40($575) = $230 in taxes.
^b The change in net working capital is a $2,900 increase in current assets minus a $700 increase in current liabilities, which totals to $2,200.

Now, examine the annual cash inflows:

After-tax revenue increase:

$3,500(1 – T) = $3,500(0.60) = $2,100.

Depreciation:

^a Depreciable basis = $12,000. Depreciation expense in each year equals depreciable basis times the MACRS percentage allowances of 0.2000, 0.3200, 0.1920, 0.1152, 0.1152, and 0.0576 in Years 1-6, respectively.
^b Depreciation tax savings = T(ΔDepreciation) = 0.4(ΔDepreciation).

Now recognize that at the end of Year 6 Gilbert would recover its net working capital investment of $2,200, and it would also receive $1,200 from the sale of the replacement machine. However, since the machine would be fully depreciated, the firm must pay 0.40($1,200) = $480 in taxes on the sale. Also, by undertaking the replacement now, the firm forgoes the right to sell the old machine for $800 in Year 6; thus, this $800 in Year 6 must be considered an opportunity cost in that year. Taxes of $800(0.4) = $320 would be due because the old machine would be fully depreciated in Year 6, so the opportunity cost of the old machine would be $800 – $320 = $480.

Finally, place all the cash flows on a time line:

Note: While the calculations above show values rounded to the nearest whole number, unrounded values should be used in all calculations above.

The net present value of this incremental cash flow stream, when discounted at 14%, is $1,433. Thus, the replacement should be made.

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Scientific NotationPeriodic TableTables

Explain why Ireland makes a good choice for a new location for a new software development company.

A food safety guideline is that the mercury in fish should be below 1 part per million​ (ppm). Listed below are the amounts of mercury​ (ppm) found in tuna sushi sampled at different stores in a major city. Construct a 90​% confidence interval estimate of the mean amount of mercury in the population. Does it appear that there is too much mercury in tuna​ sushi? 0.54  0.82  0.09  0.96  1.28  0.54  0.96

What is the confidence interval estimate of the population mean?

Use this information to draw an appropriate conclusion about whether there could be too much mercury in tuna sushi

Assignment specification — Case Study :IKEA Operations Management

IKEA is the one of the most successful furniture retailer globally. With 276 stores in 36 countries, they have managed to develop their own special way of selling furniture. Their stores’ layout means customers often spend two hours in the store – far longer than in rival furniture retailers. IKEA’s philosophy goes back to the original business, started in the 1950s in Sweden by Ingvar Kamprad. He built a showroom on the outskirts of Stockholm where land was cheap and simply displayed suppliers’ furniture as it would be in a domestic setting. Increasing sales soon allowed IKEA to start ordering its own self-designed products from local manufacturers. But it was innovation in its operations that dramatically reduced its selling costs. These included the idea of selling furniture as self-assembly flat packs, which reduced production and transport costs, and its ‘showroom-warehouse’ concept, which required customers to pick the furniture up them-selves from the warehouse (which reduced retailing costs). Both operating principles are still the basis of IKEA’s retail operations process today.

Stores are designed to facilitate the smooth flow of customers, from parking, moving through the store itself, to ordering and picking up goods. At the entrance to each store large notice boards provide advice to shoppers. For young children, there is a supervised children’s play area, a small cinema, and a parent and baby room so parents can leave their children in the supervised play area for a time. Parents are recalled via the loudspeaker system if the child has any problems. IKEA ‘allow customers to make up their minds in their own time’ but ‘information points’ have staff who can help. All furniture carries a ticket with a code number which indicates its location in the warehouse. (For larger items customers go to the information desks for assistance.) There is also an area where smaller items are displayed, and can be picked directly. Customers then pass through the warehouse where they pick up the items viewed in the showroom. Finally, customers pay at the checkouts, where a ramped conveyor belt moves purchases up to the checkout staff. The exit area has service points, and a loading area that allows customers to bring their cars from the car park and load their purchases. Behind the public face of IKEA’s huge stores is a complex worldwide network of suppliers, 1,300 direct suppliers, about 10,000 sub-suppliers, and wholesale and transport operations, including 26 distribution centres. This supply network is vitally important to IKEA. From purchasing raw materials, right through to finished products arriving in its

customers’ homes, IKEA relies on close partnerships with its suppliers to achieve both ongoing supply efficiency and new product development. However, IKEA closely controls all supply and development activities from IKEA’s hometown of Älmhult in Sweden. But success brings its own problems and some customers became increasingly frustrated with overcrowding and long waiting times. In response IKEA launched a programe ‘designing out’ the bottlenecks. The changes included:

• clearly marked in-store short cuts allowing those customers who just want to visit one area to avoid having to go through all the preceding areas;
• express checkout tills for customers with a bag only rather than a trolley;
• extra ‘help staff ’ at key points to help customers;
• redesign of the car parks, making them easier to navigate
• dropping the ban on taking trolleys out to the car parks for loading (originally implemented to stop vehicles being damaged);
• a new warehouse system to stop popular product lines running out during the day;
• more children’s play areas.

IKEA spokeswoman Nicki Craddock said: ‘We know people love our products but hate our shopping experience. We are being told that by customers every day, so we can’t afford not to make changes. We realized a lot of people took offence at being herded like sheep on the long route around stores. Now if you know what you are looking for and just want to get in, grab it and get out, you can.’ Operations management is a vital part of IKEA’s success IKEA shows how important operations management is for its own success and the success of any type of organization.

Of course, IKEA understands its market and its customers. But, just as important, it knows that the way it manages the network of operations that design, produce and deliver its products and services must be right for its market. No organization can survive in the long term if it cannot supply its customers effectively. And this is essentially what operations management is about – designing, producing and delivering products and services that satisfy market requirements. For any business, it is a vitally important activity. Consider just some of the activities that IKEA’s operations managers are involved in:

‑ Arranging the store’s layout to give a smooth and effective flow of customers (called process design).

‑ Designing stylish products that can be flat-packed efficiently (called product design).

‑ Making sure that all staff can contribute to the company’s success (called job design).

‑ Locating stores of an appropriate size in the most effective place (called supply network design).

‑ Arranging for the delivery of products to stores (called supply chain management).

‑ Coping with fluctuations in demand (called capacity management).

‑ Maintaining cleanliness and safety of storage areas (called failure prevention).

‑ Avoiding running out of products for sale (called inventory management).

‑ Monitoring and enhancing quality of service to customers (called quality management).

‑ Continually examining and improving operations practice (called operations improvement).

And these activities are only a small part of IKEA’s total operations management effort. But they do give an indication, first of how operations management should contribute to the business’s success, and second, what would happen if IKEA’s operations managers failed to be effective in carrying out any of its activities. Yet, although the relative importance of these activities will vary between different organizations, operations managers in all organizations will be making the same type of decision (even if what they decide is different).

Question:

1. How is the IKEA operations design being different from that of most furniture retail operations?

You must evaluate a proposal to buy a new milling machine. The base price is $185,000, and shipping and installation costs would add another $7,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $83,250. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $4,000 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $51,000 per year. The marginal tax rate is 35%, and the WACC is 12%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

a)How should the $5,000 spent last year be handled? (Choose from options 1-5)

1Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.

2The cost of research is an incremental cash flow and should be included in the analysis.

3Only the tax effect of the research expenses should be included in the analysis.

4Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.

5Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.

b)What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.

c)What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

Year 1 $

Year 2 $

Year 3 $

d)Should the machine be purchased?

Alexander Corporation reports the following components of stockholders’ equity on December 31, 2016: Common stock—$25 par value, 50,000 shares authorized, 33,000 shares issued and outstanding $ 825,000 Paid-in capital in excess of par value, common stock 66,000 Retained earnings 350,000 Total stockholders’ equity $ 1,241,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 3,300 shares of its own stock at $25 cash per share. Jan. 7 Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of record. Feb. 28 Paid the dividend declared on January 7. July 9 Sold 1,320 of its treasury shares at $30 cash per share. Aug. 27 Sold 1,650 of its treasury shares at $20 cash per share. Sept. 9 Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. Oct. 22 Paid the dividend declared on September 9. Dec. 31 Closed the $55,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required: 1. Prepare journal entries to record each of these transactions for 2017. 2. Prepare a statement of retained earnings for the year ended December 31, 2017. 3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2017.

The spot price of corn is $17.2 per bushel. Storage costs are $0.32 per bushel per year. Payment of storage costs occurs in advance for the next three months. Assuming that interest rates are 7% per annum, calculate the forward price of corn for delivery in 12 months.

Appreciate if you show me the calculation steps. Thank you!!

For Python, explain as much as you can please

1) What are namespaces and how are they used in Python?

2) What is the difference between Inheritance and Composition?

calculate the concentration of nickel (II) ion in the solution after the addition of 25.0 mL of 0.200 M NaCN to 60.0 mL of 0.0100 M Ni(NO3)2 (Kf is 2.0x10^31 for [Ni(CN)4]^2-)

Program

#include<iostream>

using namespace std;

struct bookRecord //structure definition

{

            //structure members definition

char title[30];

            char main_author[30];

            int year_publish;

            float price;

};

int main()

{

            struct bookRecord book1; // declare structure variable;

            //Get data from user

            cout<<"Enter book title: ";

            cin>>book1.title;

            cout<<"Enter main author name: ";

            cin>>book1.main_author;        

            cout<<"Enter year publish: ";

            cin>>book1.year_publish;

            cout<<"Enter book price RM: ";

            cin>>book1.price;

            //Print the information the screen output

            cout<<"\n\nBook Information";

            cout<<"\nTitle: "<<book1.title;

cout<<"\nMain author: "<<book1.maon_author;

            cout<<"\nYear published "<<book1.year_publish;

cout<<"\nBook price: RM"<<book1.price;

            return 0;

Task 1

Create a program to store a record using structure. You need to define one structure template with minimum 3 data members. In main function, declare one structure variable, then get input from user and store into the variable. Then your program will display the content of the structure on the screen output.

Task 2

Use the structure definition in Task 1 to store 5 records using an array of structure with five elements. Get the data from user, store into the array, then display the output in table format.

Task 3

You are required to create a program which involve nested structure. What u need to do is to create another structure that related to the structure definition in Task 1. For example you may have structure such as BookInfor and AuthorInfor. Therefore you can produce information like the book A is written by the this author B. Your program should store five records accordingly

}

write an assay to answer the following questions

a. what is a problem?

b. qive an eplanation of the term problem-solving.

c. what you do to develop learners' problem-solving skills?

your assay should include how each of the follwing is related to problem-solving

-explain what a problem is

-what kinds of problems there are

-problem solving strategies

-representations

-prior knowledge

-cognitive architecture and memory

-knowledge organisation

1. Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company's geologist, has just finished his analysis of the mine site. He has estimated that the mine would be productive for eight years, after which the gold would be completely mined. Dan has taken an estimate of the gold deposits to Alma Garrett, the company's financial officer. Alma has been asked by Seth to perform an analysis of the new mine and present her recommendation on whether the company should open the new mine.

Alma has used the estimates provided by Dan to determine the revenues that could be expected from the mine. She has also projected the expense of opening the mine and the annual operating expenses. If the company opens the mine, it will cost $635 million today, and it will have a cash outflow of $45 million nine years from today in costs associated with closing the mine and reclaiming the area surrounding it. The expected cash flows each year from the mine are shown in the table. Bullock Mining has a 12 percent required return on all of its gold mines.

Questions:

1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and the net present value of the proposed mine.

2. Based on your analysis, should the company open the mine?

3. Bonus question: Most spreadsheets does not have a built-in formula to calculate the payback period. Write a VBA script that calculates the payback period for a project.

Change the cash-flows as follows

Investment: 600,000,000

B. Answer the same question from problem 1

A. Arrays An array is basically of collection of related variables of the same type. For example, a collection of grades of students, a collection of salary of employees of a company, etc. When working with student grades, for example, we can then perform statistical computations on that set of data to obtain more meaningful information. In this part of the lab, you will write a complete C++ program named Lab6A.cpp that allows the user to enter the grades of 10 students in a class in an array called grades and you will calculate the standard deviation of those grades using the following formula for standard deviation, �: � = #1 �&(�! − �)" # !$% where � is the number of grades, or ����, �! are the individual grades, and � is the mean. Let’s go ahead and start: • First, declare a constant integer called SIZE and initialize it to 10. • Now, declare an array of floating-point numbers called grades that can hold 10 grades, using the constant that you just declared for the size. 2 • Declare three additional floating-point numbers to store the mean (i.e., average), sum, and standard deviation. Initialize both the sum and standard deviation variables to 0. • Process the array of grades using a for loop as follows to read in the grades and calculate the mean: o Prompt for and read in grades into the array. o Add each grade to the current sum. • Calculate the mean by taking the sum of all the grades and dividing by SIZE. • Now, use another for loop to sum the square of the difference of the grades and the mean as follows: o Add the square of the difference of the grade and the mean to the standard deviation. To make things clearer, use the pow() function with the first argument being the current grade in the array minus the mean, and the second argument being 2 for the square. Then, simply add that result to the current standard deviation. • Finally, take the square root of the standard deviation divided by SIZE and print the result. As an example, the standard deviation of 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 is 2.87228. Once you complete your program, save the file as Lab6A.cpp, making sure to compile and run the program to verify that it produces the correct results. Note that you will submit this file to Canvas.