Answer:
The answer is: the unit variable expense is $1.20 per machine hour
Explanation:
In order to calculate the unit variable cost we first take the month with the highest and lowest maintenance expense and machine hours (Highest = month 6, Lowest = month 11). We use the following formula:
unit variable cost = (highest expense - lowest expense) / (highest machine hours - lowest machine hours)
= ($3,680 - $2,780) / (2,440 - 1,690) = $1.20 per machine hour
Answer: C) $2,000 per week.
Explanation:
The slope of the project refers to the additional amount that it would cost to be able to finish the project faster than schedule.
In the question, the construction activity is for 14 weeks at a rate of $5,000 for the laborers per week. If you wanted to reduce this project duration to 10 weeks, you will have to spend an additional $2,000 more per week.
This $2,000 is therefore the slope of the activity.
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Answer:
(a) What is the net present value of this potential investment?
Net present value of Investment is $(3,903)
(b) Should you invest in this machine?
We should not invest in this investment because Net present value of this investment is negative by discounting Minimum acceptable rate of return.
Explanation:
Present Values:
Revenue $144,146
O&M Cost ($48,049)
Initial Investment <u>$(100,000)</u>
Net Present value $(3,903)
Working :
Present Value Calculation = P x ( (1- ( 1 + r )^-10) / r
Revenue = $21,000 x ( (1- ( 1 + 0.075 )^-10) / 0.075 = 144,146
O&M Costs = $7,000 x ( (1- ( 1 + 0.075 )^-10) / 0.075 = 48,049
Answer:
Net Present Value (NPV) is 506
Explanation:
See document attached. To get the net present value, we make a cash flow in excel.
At moment 0 we have the investment cost , in this case $13,400. From period 1 to period 4, we have different incomes. Then, we calculate the Net cash flow that is the difference between benefits and cost.
To get net present value, we use VNA formula.
=VNA(required rate of return; Net cash flow from moment 1 to moment 4 )+Net cash flow at moment 0