1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
aev [14]
3 years ago
5

A new alloy can be produced by Process A, which costs $200,000 to implement. The operating cost will be $10,000 per quarter with

a salvage value of $25,000 after its 2 year life. Process B will have a first cost of $250,000, an operating cost of $15,000 per quarter, and a $40,000 salvage value after its 4 year life. The interest rate is 8% per year compounded quarterly. What is the present value difference between A and B?
Business
1 answer:
Andreyy893 years ago
7 0

Answer:

Difference between A and B =$42398.5

Process B is better as its PW value is smaller than Process A.

Explanation:

In order to use present worth, both Alternatives must have same time period. Since Process B has 4 years means 16 quarters so we make process A to have 16 quarters two with 2% interest rate per quarter.

Note:

We are going to use Compound Interest tables to simplify our work. Formulas can also be used.

For Process A:

Present value of process A=-200,000-200,000(P/F,2\%,8)-10,000(P/A,2\%,16)+25,000(P/F,2\%,8)+25,000(P/F,2\%,16)

Present value of process A=-200,000-200,000(0.8535)-10,000(13.578)+25,000(0.8535)+25,000(0.7284)

Present value of process A=-$466,932.5

For Process B:

Present value of process B=-250,000-15,000(P/A,2\%,16)+40,000(P/A,2\%,16)

Present value of process B=-250,000-15,000(13.578)+40,000(0.7284)

Present value of process B=-$424,534

Difference between A and B =(-$424,534)-(-$466,932.5)

Difference between A and B =$42398.5

Process B is better as its PW value is smaller than Process A.

You might be interested in
Storm Concert Promotions Valle Home Builders Actual indirect materials costs$12,400 $7,000 Actual indirect labor costs 55,900 46
Minchanka [31]

Answer and Explanation:

Storm Concert Promotions

The computation of overhead is shown below:-

Factory Overhead-Storm

Indirect materials $12,400           Applied overhead    91,600

Indirect Labor       $55,900

Other overhead

costs                       $16,000

                                                   Overapplied overhead $7,300

The Journal entry is shown below:-

Factory overhead Dr, $ 7,300

     To Cost of goods sold $7,300

(Being cost of goods sold is recorded)

Valle Home Builders

The computation of overhead is shown below:-

Factory Overhead-Value home builders

Indirect materials $7,000           Applied overhead    98,300

Indirect Labor       $46,900

Other overhead

costs                       $48,900

                                                  Overapplied overhead $4,500

Factory overhead Dr, $ 4,500

     To Cost of goods sold $4,500

(Being cost of goods sold is recorded)

5 0
3 years ago
If the market risk premium increased to 6%, what would happen to the stock's required rate of return
Inessa [10]

Answer:

13%

Explanation:

As per the situation the solution of required rate of return first we need to find out the beta which is shown below:-

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

11% = 7% + Beta × 6%

Beta = 1

now If the market risk premium increased to 6% so,

The required rate of return = 7% + 1 × 6%

= 13%

Therefore for computing the required rate of return we simply applied the above formula.

7 0
3 years ago
Pls help
Arturiano [62]

Answer:

True

Explanation:

You should incorporate your life desires into choosing a career choice because if you are not happy with your job or you don't feel fulfilled with what you are doing then you are only harming yourself mentally and sometimes physically by continuing to do something that doesn't fit with your desires.

4 0
3 years ago
Who was the first human beings​
denpristay [2]

Answer:

there is not first human beings but I hope this will help you

Explanation:

The earliest members of the genus Homo are Homo habilis which evolved around 2.8 million years ago. Homo habilis has been considered the first species for which there is clear evidence of the use of stone too

8 0
3 years ago
you expect it to pay a dividend of $3 in 1 year, $4.25 in 2 years, and $6.00 in 3 years. You expect to sell the stock for $100 i
Rus_ich [418]

Answer:

$81.52

Explanation:

In this question, we are asked to state the price to pay for a stock at this present day.

To calculate this, we compute it mathematically.

Mathematically, we have;

dividend/(1+required return rate)^year

we then add together

we have

=3/(1.12) + 4.25/(1.12)^2 + 6/(1.12)^3 + 100/(1.12)^3 = 81.52

7 0
3 years ago
Other questions:
  • On January 1, year 1, Ziegler issued 5-year bonds with a stated rate of 8% and a face amount of $100,000. The bonds pay interest
    5·1 answer
  • Angela, a salesperson at QuantaSource, informs her coworkers that one of their accounts requires a high level of selling effort
    12·1 answer
  • A.J. is the vice president for Keane Products, a marketing consulting firm. On a business trip to New York City in 2019, he meet
    7·1 answer
  • How do the media affect which issues the public thinks are important?
    9·1 answer
  • Suppose during 2014 that Federal Express reported the following information (in millions): net sales of $35,497 and net income o
    11·2 answers
  • Assume that the company wanted to do some advertising in the states where the candidates were campaigning about the benefits of
    5·1 answer
  • After teaching a class on game theory. your instructor announces that if every student fails to post on the last discussion boar
    8·1 answer
  • A monopoly firm is the only seller of a good or service that A) does not need to be advertised. B) has no close complements C) d
    13·1 answer
  • The owner of a leased property conveys possession of the property to the tenant providing them with uninterrupted us of the prop
    7·1 answer
  • Each scenario below gives some information about price elasticity of demand for a firm. Use this information to answer the quest
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!