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
timofeeve [1]
3 years ago
5

Shelton Co. purchased a parcel of land six years ago for $866,500. At that time, the firm invested $138,000 in grading the site

so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $50,500 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $918,000. What value should be included in the initial cost of the warehouse project for the use of this land?
Business
2 answers:
Nadya [2.5K]3 years ago
6 0

Answer:

$918,000 should be included  in the initial cost of the warehouse project.

Explanation:

Capitalised cost of an asset includes all the costs incurred to make the asset operational or usable.

In this question warehouse project incurred many expense to build the warehouse, as all of these expenses are sunk cost and will not be considered for the warehousing project.

We will only consider the current value of the land for this purpose which is $918,000.

nikklg [1K]3 years ago
5 0

Answer: $918,000

Explanation: Since Shelton Co is considering building a warehouse on the site because the rental lease is expiring then in  evaluating the new project all the relevant cash flows must be considered in  the protect evaluation. Market value of the land used for constructing the building is an opportunity cash flow and so must  be considered.  The Relevant cost of opportunity for land will be its fair value.

Therefore ,the initial cost cost of the warehouse project for the use of this land is $918, 000.

You might be interested in
Pharoah Company reported net income of $1.30 million in 2022. Depreciation for the year was $208,000, accounts receivable decrea
Jet001 [13]

Answer:

Net cash flow from operating activities

$1,599,000

Explanation:

Pharoah Company

Cash flow from operating activities :

Net income $1,300,000

Net Cash flow from operating activities:

Add depreciation $208,000

Add accounts receivable decreased $455,000

Less accounts payable decreased ($364,000)

Net cash flow from operating activities $1,599,000

7 0
3 years ago
When I was considering what to do with my $10,000 lottery winnings, my broker suggested that I invest half of it in gold, the va
77julia77 [94]

Answer: $20,478.78

Explanation:

In 14 years the investment will be,

Gold

10,000/2 = 5000

Then use the compound interest formula

5000 * (1+0.07)^ 14 = $12,892.67

For Certificates of Deposits.

Use the Compound interest formula

Rate and period are in years. Convert to semi annual basis.

3%/ 2 = 1.5%

14 * 2 = 28 periods

= 5000 ( 1+ 0.015) ^ 28

= $7,586.11

Add both

=$12,892.67 + $7,586.11

= $20,478.78

5 0
3 years ago
The company Lucy works for is made of cross-functional teams that focus on the project at hand. The projects they get are extrem
liberstina [14]

Answer:

Small batch and unit production.

Explanation:

Small batch and Unit production -

In this type of production , the primary focus of the organisation , is the satisfaction of the customer and is based on the preference of the customer .

For this type of manufacturing process , skilled labor and planning is very important to customize and prepare any good or service .

sometimes , the complete team focus on the production of the product one at a time , with lot of caution .

Hence , the information given in the question , the type of manufacturing process is best describes as Small batch and unit production .

6 0
3 years ago
Prextos Corp., after incurring losses, decides to move its manufacturing unit to a foreign location where it would get labor at
Darya [45]

Answer:

Offshoring

Explanation:

offshoring is the  process of  moving an aspect of a business process overseas with the intention of  reducing cost.

A firm can move its manufacturing process from its own parent country to another country (usually where the  labour rate and cost of raw materials is cheap compared to what it obtainable in its home country) in other to  reduce  its cost of production thereby increasing its added value.

From the above explanation, we can conclude that Prextos is planning to employ  Offshoring to cut down losses.

7 0
3 years ago
John bought 1,700 shares of Intel stock on October 18, 2015, for $44 per share plus a $750 commission he paid to his broker. On
Dvinal [7]

Answer:

Explanation:

A. John’s basis in the 1,000 shares of Intel stock is $45,750.

is the purchase price of $30,000 (i.e., 44 × $1,000) plus the $750 commission paid to the broker.

b.On the sale, John realizes $62500. This is the sales price of $63500 (i.e., 1,000 × $63.50)minus the transaction fee of $1,000.

c.John’s gain on the sale is $16,750 which is the amount realized minus his adjusted basis (i.e., $62500 – 45,750). The gain is a long-term capital gain because John held the stock for more than a year before selling

4 0
3 years ago
Other questions:
  • Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 30,000 units follow
    10·2 answers
  • How should the davises react to adidas' planned acquisition of reebok? what aspects of new balance's operations strategy should
    7·1 answer
  • Farmer Corp. owned 20,000 shares of Eaton Corp. purchased in 2009 for $300,000. On December 15, 2012, Farmer declared a property
    14·1 answer
  • Alco roofing company's beginning accounts receivable were $200,000 and ending accounts receivable were $270,000. during the peri
    9·1 answer
  • For what type of financial aid can you apply through the FAFSA?
    7·2 answers
  • In a condominium, who is responsible for maintaining the internal systems of an individual unit?A. The condominium associationB.
    10·1 answer
  • Suppose that over the last twenty-five years a country's nominal GDP grew to three times its former size. In the meantime, popul
    7·2 answers
  • Travis has a 2,400 square foot home. He is self employeed and uses one room of his home exclusively for his business. The area o
    9·1 answer
  • Leahy Corp. sells $300,000 of bonds to private investors. The bonds are due in five years, have a 6% coupon rate, and interest i
    7·1 answer
  • Yared plc assembles and sells bicycles in bahir dar city. the company expects to sale 400 bicycles for br. 600 each in 2015. the
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!