Determine what a person should take into account when purchains expensive, durable goods.

Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.

Sedbober [7]

Answer:

Explanation: please refer to the explanation section

Initial fixed asset Investment = 2.33million = 2 330 000

Modified Accelerated Cost recovery System

The Fixed Asset Falls under the 3 year MACRS class the project the asset which states that Asset Depreciation range Midpoint is 4 years or less The period for this project is 3 years

Estimated annual sales = $1735000

costs = $640,000

Initial Net working Capital investment = $300,000

Residual Value (Value of the fixed asset at the end) = $255,000

a. Projected Cash flows

Year 0

Cash outflows = 2 330 000 - 300 000 - 255 000 = 2375000

year 1 year 2 year 3

Estimated sales 1735000 1735000 1735000

costs -640000 -640000 -640000

Depreciation -791666.67 -791666.67 -791666.67

Residual Value 255000

Net sales 303333.33 303333.33 558333.33

Tax 25% -75833.33 -75833.33 -139583.33

Net Cash flows 227500 227500 418750

Depreciation = (2330 00 + 300 000 -255000)/3= 791666.67

Tax = Net sales x 25%

b Net Present Value (Required rate Return = 9%)

PV = 227500/(1+0.09)^1 + 227500/(1 + 0.09)^2 + 418750/(1+0.09)^3

Present Value of cash flows = 723549.63

Net Present Value = 723549.63 - 2630 000 = -1906450.37

The net present Value is Negative indicating the project will not bring positive returns

5 0

3 years ago

Neon Electronics Inc. sourced touch screens required for its tablet computers, cell phones, and televisions from a manufacturer

tamaranim1 [39]

This scenario best illustrate Backward vertical integration

Explanation:

Backward integration is a vertical integration that extends the role of a organization to perform roles traditionally performed by firms in the supply chain.

In other terms, backward integration is where an enterprise imports another company providing the necessary goods or services for production.

For examples, an company might purchase the product or raw materials manufacturer. Businesses often complete retrograde incorporation of these other businesses or combine of them. However, they may set up their own divisions to perform this mission.

7 0

3 years ago

Under Life Solicitation Rule, the definition that applies to a consumer that is most concerned about death benefit proceeds to b

Fiesta28 [93]

Answer:

life insurance net payment cost index

Explanation:

The accidental death benefit is referred to as a payment due to the sole beneficiary of an accidental death insurance policy. The accidental death benefit mostly is an amount paid which adds to the standard benefit payable if

and only if the insured died of natural causes e.g old age, earthquake or tsunami etc.

Depending on the issuer of the policy, the accidental death benefit may extend up to a year after the initial accident occurred, so long as the accident led to the insured's death.

6 0

3 years ago

5. A business in its first period of trading charges $4,000 of sales tax on its sales and suffers $3,500 of sales tax on its pur

Katyanochek1 [597]

The unrecoverable sales tax on business entertaining ($250) has been deducted from $3,500

solution

SALES TAX CONTROL ACCOUNT

Payable s $ 3250 Receivables $4000

Balance c/d (owned to tax authority) $ 750

------------- ---------------

$ 4000 $4000

-------------- ----------------

By balance b/d $ 750

8 0

3 years ago

What can you conclude about the relationship between the slope of the demand curve above and its elasticity?

NemiM [27]

Answer:

By definition, the price elasticity of demand equals the percentage changes in the quantity demanded divided by the percentage changes in the price. There is an opposite relationship between the demand elasticity and the slope of the demand curve.

6 0

3 years ago