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zaharov [31]
3 years ago
10

Dusty is evaluating two bids to supply fence hardware for the 5 acres of pasture that need to be fenced. breezy submits a bid of

​ $40 per unit with a defect rate of​ 3%, and lady's bid is​ $50 per unit with a defect rate of​ 0.5%. if a section of fence​ fails, it costs an average of​ $500 in losses and herding costs to round up all of the capybaras. dusty believes it will take 500 units to fence in this pasture​ configuration; which supplier should win the​ business?
Business
2 answers:
Allushta [10]3 years ago
6 0
Let us see it from a cost-efficiency point of view. We have that every unit of the first selles costs 40$. But the total cost might be higher, since there is a chance for defect. On average, on 3% of the cases the defect will happen and it will cost him 500$. Hence, on average, a fence unit from producer a costs 40$ and has a repair cost of 3%*500$=15$. The total thus is 55$. For the second provider of fences, the standard cost is 50$. Similarly, the average repair cost is 0,5%*500$=2,5$. Hence, the total cost per unit is 52,5$ (total cost=upfront payment+repair costs). We see thus that the lady should win the bid; even if you pay more upfront, the difference in durability makes up the cost difference.
garik1379 [7]3 years ago
5 0
<span>Dusty believes it will take 500 units to fence in this pasture​ configuration; and the supplier that should win the​ business is the lady.</span>
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COMMUNIST

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Following is information on two alternative investments being considered by Jolee Company. The company requires a 10% return fro
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Answer:

A. NPV for A= $61,658.06

NPV  for B = $25,006.15

B.  1.36

1.17

Project A

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be calcuated using a financial calculator

for project A :

Cash flow in

Year 0 = $(172,325)

Year 1 41,000

Year 2 47,000

Year 3 85,295

Year 4 86,400

Year 5 56,000

I = 10%

NPV = $61,658.06

for project B

year 0 = $ (145,960)

Cash flow in

Year 1  27,000

Year 2  52,000

Year 3 50,000  

Year 4 71,000

Year 5  28,000

I = 10%

NPV = $25,006.15

profitability index = 1 + NPV / Initial investment

for project A, PI = $61,658.06 / 172,325 = 1.36

For project B, PI = $25,006.15 / 145,960 = 1.17

The project with the greater NPV and PI should be chosen. this is project A.

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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Answer:

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While recording the transaction, we debited the cash account as it increases the cash balance and credited the note receivable.

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A budget is usually constructed for a period of
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Answer:

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