Reimer Company reported total manufacturing costs of $425,000, manufacturing overhead totaling $80,000, and direct materials tot
1 answer:
Answer:
$245,000
Explanation:
Total manufacturing costs are comprised by three components: manufacturing overhead, direct materials cost and direct labor cost.
If we are given the amount for each cost mentioned above except the labor cost, direct labor cost can be simply obtained by:
The direct labor cost is $245,000.
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Answer:
The investment that will have the highest future value is option b.
Explanation:
First lets suposse the effective annual rate is 10%
a. Future value= $2,500
c. First you must obtain the net present value of all cash flows with the formula attached, for example:
NVP= ($250/(1+10%)^1)+($250/(1+10%^2)+($250/(1+10%^3)... and so on until year 10
With the excel formula "NPV" you can calculate the net present value specifying the interest rate, the cash flows.
The NPV= $1,536.14
And then you calculate the future value of this answer with this formula:
VF=VP(1+i)^n
VF= $1,536.14*(1+10%)^10
VF=$3,984.36
b. If payments are due at the beginning of every year means that at year 0 you start with $250. You must calculate the NPV in this way
NPV= $250+($250/(1+10%)^1)+ )+($250/(1+10%^2)+($250/(1+10%^3)... and so on until year 10
NPV= $1,786,14
And then you calculate the future value of this answer:
VF= $1,786,14*(1+10%)^10
VF=$4,632.79
d. First, you must convert the annual interest rate into semi-annually interest
10% Annually effective is 4,88% Semi-anually effective
NPV=$125+($125/(1+4,88%)^1)+ )+($125/(1+4,88%^2)+($125/(1+4,88%^3)... and so on until period 20
NPV=$1,698.75
And then you calculate the future value of this answer:
VF= $1,698 *(1+10%)^10
VF=$4,405.37
The investment that will have the highest future value is option b.
