Answer:
$5 per unit
Explanation:
In this question, we compare the total cost and outside supplier cost which are shown below:
Total cost = Direct material per unit + direct labor per unit + variable overhead per unit
= $10 + $14 + $3
= $27
And, the outside supplier cost is $32
So, the incremental cost would be
= $32 - $27
= $5 per unit
The fixed cost would remain unchanged. So, we do not consider it.
Answer:
NPV is positive,the project should be accepted
Explanation:
In determining whether or not the project should be accepted ,we need to ascertain the Net Present value of the project which is present value of cash inflows of $13,000 for 35 years minus the initial investment of $125,374.60 committed today.
The annuity factor for 8% for 35 year horizon is 11.6546 using annuity table.
Present of cash inflow=cash inflow*annuity factor=$13,000*11.6546=$151,509.80
Net present value=$ 151,509.80-$125,374.60=$ 26,135.20
The investment has a positive NPV,hence should be accepted
Answer:
royalties
Explanation:
Based on the scenario being described within the question it can be said that in the context of business these obligations are referred to as royalties. Royalties are shared obligations in which the franchisee agrees to pay the franchisor part of the profits that they make from using their brand name or products. Such as is being illustrated in this scenario.
Stores can make sure their employees are being incentivized when what they do benefits the customer and the store as a whole. Their main goal is to serve the customer because a happy customer comes back and refers their fiends. The employees can be rewarded on referral base actions, feedback cards and other ways that show management they are being honest and truthful to the customer.
