Joni Hyde Inc. has the following amounts reported in its general ledger at the end of the current year.
1 answer:
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Answer:
The annual financial advantage for the company as a result of accepting this special order from the City of Clearwater should be $144,000.
Explanation:
To know the net effect that this special order, we have to list all the differential cost that the company will incur for this additional sale.
The sell price is $75.
The fixed costs are not affected, so we will not include them in the calculation.
The variable manufacturing cost is $25/unit.
The variable selling and administrative cost for this special order are $2/unit.
There are no other cost affected for the acceptance of this order.
Then, the contribution margin of this special order (3,000 units) is:
The annual financial advantage for the company as a result of accepting this special order from the City of Clearwater should be $144,000.
Answer:
the internal rate of return is 12%
Explanation:
The computation of the internal rate of return is as follows;
Year Cash flows
0 -$178,848
1 $36,000
2 $36,000
3 $36,000
4 $36,000
5 $36,000
6 $36,000
7 $36,000
8 $36,000
Now apply the IRR formula
= IRR()
After applying it, the internal rate of return is 12%
