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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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Serge is a landscape architect who manages a team of 12 employees who work primarily on commercial landscaping projects. Serge i
Lilit [14]

Answer:

Serge purchases the Bobcat due to its _______.

brand equity.

Explanation:

We are considering Serge's preference for Bobcat skid steer machine based on some perceived values.  These values can be described as the brand equity. The Bobcat's brand equity represents the commercial value which customers derive from Bobcat's skid steer when compared with the products of Bobcat competitors.  Purchasing a Bobcat skid steer makes Serge to feel that he has received enough value notwithstanding the more expensive price he pays vis-a-vis choosing the alternatives offered by Bobcat's competitors.  In the equity value, Serge has included the "variety of add-on products that extend the usefulness of the skid steer, a great warranty, and a competitive price."

4 0
2 years ago
A __________ provides a summary of cash coming into and money going out of a firm from operations activities, financing activiti
masya89 [10]

Cash Flow Statement provides a summary of cash coming into and money going out of a firm from operations activities, financing activities, and investing activities.

<h3>What is Cash Flow Statement?</h3>

A financial document called the cash flow statement (CFS) outlines the inflow and outflow of a company's cash and cash equivalents (CCE). The CFS gauges how effectively a business manages its cash position, or how successfully it generates cash to cover its debt payments and finance its operating costs. The balance sheet and the income statement are two of the three primary financial statements, and the CFS is the third. We'll outline the CFS's structure and application to company analysis in this article.

A cash flow statement lists all of the cash and cash equivalents that come into and go out of a business.

A company's cash management, especially how successfully it earns cash, is highlighted by the CFS.

To learn more about Cash Flow Statement from the given link:

brainly.com/question/735261

#SPJ4

8 0
1 year ago
When they produce 20,000 units per month, Sanders Incorporated has variable costs of $392,000 and fixed costs of $242,000. If Sa
Lady_Fox [76]

Answer:

increased in budget = $98000

correct option is A $98000

Explanation:

given data

produce = 20,000 units per month

variable costs = $392,000

fixed costs = $242,000

increases production = 25,000 units

to find out

how much will they have to increase their budget

solution

we get here total cost or present budget that is

total cost = variable cost + fixed cost

total cost = $392000 + $242000

total cost = $634000

and

variable cost per unit will be here

variable cost per unit = \frac{variable\ costs}{produce}

variable cost per unit = \frac{392000}{20000}

variable cost per unit = 19.6

and

variable cost for increased production = increases production × variable cost per unit  

variable cost for increased production = 25000 × 19.6

variable cost for increased production = 490000

and

total cost of increased production = fixed cost + variable cost for increased production

total cost of increased production = $242000 + $490000

total cost of increased production = $732000

and

increased in budget = $732000 - $634000

increased in budget = $98000

correct option is A $98000

6 0
3 years ago
has acquired several other companies. Assume that Patton purchased Kate for $ 6 comma 000 comma 000 cash. The book value of Kate
svlad2 [7]

Answer and Explanation:

1. The amount of goodwill is shown below:

= Purchase price - the market value of net assets

= $6,000,000 - ($17,000,000 + $13,000,000)

= $2,000,000

2. Now the journal entry for purchase is

Assets $17,000,000

Goodwill $2,000,000

      To Liabilities $13,000,000

      To Cash $6,000,000

(Being the purchase is recorded)

For recording this we debited the assets and goodwill as it increased the assets and credited the liabilities and cash as it also increased the liabilities and decreased the assets

5 0
3 years ago
SUB TO ME thunderoflight12 PLSSSSSSSSSSSSSSS I WILL MARK BRAINLYIST IF YOU DO FOR ALL MY THINGS
qwelly [4]
I will look at your profile and see if I can subscribe based on your content
7 0
3 years ago
Read 2 more answers
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