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avanturin [10]
3 years ago
6

Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch

has a first cost of $105,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $3,200 per year using the gang punch, but raw material costs would decrease $12,250 per year. MARR is 5%/year. a)What is the present worth of this investment?
b)What is the decision rule for judging the attractiveness of investments based on present worth?

c)Should Bailey buy the gang punch?
Business
1 answer:
cricket20 [7]3 years ago
7 0

Answer:

a) Present value of the investment: $198,936

b) if the present worth of the investment which are discounted at MARR rate is positive, the investment is worth investing, while if the present value of the investment is negative, Investor should not invest.

c) As calculated in (a), present value of the investment is $198,936, Bailey should buy the gang punch

Explanation:

Please find detailed of calculation in (a) which is shown as below:

Present value =  Present value of saving in raw material - Present value of increase in labor cost - Initial investment = [ (12,250/ 5%) x (1-1.05^-15)] -  [ (3,200/ 5%) x (1-1.05^-15)] - 105,000 = $198,936.

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Better Corp. (BC) began operations on January 1, Year 1. During Year 1, BC experienced the following accounting events: 1. Acqui
yuradex [85]

Answer:

Better Corp. (BC)

a. Accounting Equation

Assets                =       Liabilities       +               Equity

1. Cash $7,000                                                   Common stock $7,000

2. Cash $12,000        Bank loan payable $12,000

3. Cash $47,000                                                Service Revenue $47,000

4. Cash ($30,000)                                              Op. expenses ($30,000)

5. Cash ($8,000)                                                Cash dividend ($8,000)

6. Land $20,000 Cash ($20,000)

Assets $28,000   =  Liabilities $12,000  + Equity $16,000

b. December 31, Year 1 Balances:

Total assets = $28,000

Total liabilities = $12,000

Stockholders' equity = $16,000

Balance Sheet as of December 31, Year 1

Assets:

Cash                     $8,000

Land                  $20,000

Total assets      $28,000

Liabilities:

Bank loan         $12,000

Equity:

Common stock $7,000

R/Earnings          9,000

Total equity    $16,000

Liabilities and

 Equity          $28,000      

c. January 1, Year 2 Balances:

Total assets = $28,000

Total liabilities = $12,000

Total equity = $16,000

d. The Land will be shown on the December 31, Year balance sheet at $20,000.  The reason is that this is the acquisition cost and the land is not held for trading (no information provided).

Explanation:

a) Data and Analysis based on the Accounting Equation:

1. Cash $7,000 Common stock $7,000

2. Cash $12,000 Bank loan payable $12,000

3. Cash $47,000 Service Revenue $47,000

4. Cash ($30,000) Operating expenses ($30,000)

5. Cash ($8,000) Cash dividend ($8,000)

6. Land $20,000 Cash ($20,000)

4 0
3 years ago
The executive leadership team of a large corporation is analyzing a report. The report's contents have information that can be u
gregori [183]

Answer:

The answer is D.

Explanation:

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What types of information does a W-2 form contain? Check all that apply
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Answer:

Normally "check all that apply" is followed by answers to check...

Explanation:

A W-2 is a Tax statement

8 0
3 years ago
Incomplete manufacturing costs, expenses, and selling data for two different cases are as follows.
malfutka [58]
If you need to indicate the missing ammount of each letter in the grahp then it will be like follows:
 For the first case:
A = $9,600 + $5,000 + $8,000 = $22,600$22,600 + $1,000 – B = $17,000
B = $22,600 + $1,000 – $17,000 = $6,600$17,000 + C = $20,000
C = $20,000 – $17,000 = $3,000
D = $20,000 – $3,400 = $16,600
<span>E = ($24,500 – $2,500) – $16,600 = $5,400
</span><span>F = $5,400 – $2,500 = $2,900
</span>And now for the second case:
G + $8,000 + $4,000 = $16,000
G = $16,000 – $8,000 – $4,000 = $4,000$16,000 + H – $3,000 = $22,000
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<span>I = $1,400 + $22,800 + $7,000 = $31,200
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3 years ago
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timurjin [86]

Answer:

Option D The role of technological innovation and entrepreneurs as central to economic growth.

Explanation:

The reason is that these generate value of the country's product due to its uniqueness and preferable services provision which means that the exports of the product will grow and the domestic sales will also grow if the product is innovative. Innovations brings the demand because nowadays the fight is not on the borders the fight among countries is generating heavy amount of reserves through increase in exports. And this growth in economy is only possible if the country's products are produced efficiently on the international market which is only possible if the innovation has decreased the cost of producing the products or the products produced are efficient.

3 0
3 years ago
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