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Marianna [84]
3 years ago
9

Rowell Company spent $3 million two years ago to build a plant for a new product. It then decided not to go forward with the pro

ject, so the building is available for sale or for a new product. Rowell owns the building free and clear, that is, there is no mortgage on it. Which of the following statements is CORRECT?
A. Since the building has been paid for, it can be used by another project with no additional cost. Therefore, it should not be reflected in the cash flows for any new project.
B. If the building could be sold, then the after-tax proceeds that would be generated by any such sale should be charged as a cost to any new project that would use it.
C. This is an example of an externality, because the very existence of the building affects the cash flows for any new project that Rowell might consider.
D. Since the building was built in the past, its cost is a sunk cost and thus need not be considered when new projects are being evaluated, even if it would be used by those new projects.
E. If there is a mortgage loan on the building, then the interest on that loan would have to be charged to any new project that used the building.
Business
1 answer:
ELEN [110]3 years ago
3 0

Answer:

B. If the building could be sold, then the after-tax proceeds that would be generated by any such sale should be charged as a cost to any new project that would use it.

Explanation:

The proceeds from a potential sale are the opportunity cost of using the building for a given project instead of selling to a third party. Not including any cost will lead to project not recovering the entire capital used in it.

Is important to notice this is the after-tax proceeds from the sale of the building.

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If $13,000 is borrowed at 5.8% simple interest for 10 years, how much interest will be paid for the loan
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Answer:

7,540

Explanation:

Principle is $13,000

Rate is 5.8%

Time is 10 years

Therefore the simple interest can be calculated as follows

= principle × rate × time

= 13,000 × 5.8/100 × 10

= 13,000 × 0.058×10

= 7,540

Hence the simple interest is 7,540

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IrinaVladis [17]

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In other words, each stage of the supply chain must operate in an integrated manner, so that each process is synergistic and so that the final consumer can receive the product at the right time, in the right quantity and in the right quality. Therefore, supply chain management will improve each step of the process, guaranteeing the quality of the processes, the reduction of time, the reduction of costs and waste and ensuring the continuous improvement of the process, which will make the product go through each channel effectively, generating value and strengthening the relationship between the company and the consumer.

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