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Anton [14]
3 years ago
8

Coache Corporation is considering a capital budgeting project that would require an investment of $120,000 in equipment with a 4

year useful life and zero salvage value. The annual incremental sales would be $310,000 and the annual incremental cash operating expenses would be $230,000. In addition, there would be a one-time renovation expense in year 3 of $30,000. The company's income tax rate is 30%. The company uses straight-line depreciation on all equipment. The total cash flow net of income taxes in year 3 is:
a. $44,000
b. $35,000
c. $65,000
d. $50,000
Business
1 answer:
Kaylis [27]3 years ago
6 0

Answer:

a. $44,000

Explanation:

The computation of the total cash flow net of income taxes in year 3 is shown below:

= Incremental sales - annual incremental cash operating expenses - one-time renovation expense - depreciation expense - income tax expense + depreciation expense

= $310,000 - $230,000 - $30,000 - $30,000 - $6,000 + $30,000

= $44,000

Since depreciation is a non-cash expense so it would be added back to the computation part

The depreciation expense would be

= (Original cost - residual value) ÷ (useful life)

= ($120,000 - $0) ÷ (4 years)

= ($120,000) ÷ (4 years)  

= $30,000

And, the income tax expense would be

= (Incremental sales - annual incremental cash operating expenses - one-time renovation expense - depreciation expense) × tax rate

= ($310,000 - $230,000 - $30,000 - $30,000) × 30%

= $20,000  × 30%

= $6,000

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Your business has purchased 500 pizza pans, 60 kg of sauce, 100 kg of cheese, 2.5 kg of basil, 2.5 kg of oregano, 5 kg of yeast,
adelina 88 [10]

Answer:

400 pizzas

Explanation:

The complete question would be:

<em>You are going into the business of making pizzas. The following is the list of ingredients to make ONE pizza: </em>

<em>400 g flour           50 mL water </em>

<em>10 g yeast             120 g sauce </em>

<em>250 g cheese       5 g oregano </em>

<em>5 g basil </em>

<em>Your business has purchased 500 pizza pans, 60 kg of sauce, 100 kg of cheese, 2.5 kg of basil, 2.5 kg of oregano, 5 kg of yeast, and 200 kg of flour. You have as much water as you need. How many pizzas can you make? </em>

You are going to have to make a couple of conversions to do this. Since everything you need is indicated in grams, we first need to convert everything you have in grams.

There are 1,000 g in 1 kg. So now we convert them all:

60 kg of sauce

60kg \times \dfrac{1,000g}{1kg} = 60,000g

100 kg of cheese

100kg \times \dfrac{1,000g}{1kg} = 100,000g

2.5 kg of basil

2.5kg \times \dfrac{1,000g}{1kg} = 2,500g

2.5 kg of oregano

2.5kg \times \dfrac{1,000g}{1kg} = 2,500g

5 kg of yeast

5kg \times \dfrac{1,000g}{1kg} = 5,000g

200 kg of flour

200kg \times \dfrac{1,000g}{1kg} = 200,000g

So now that we know what we have, we determine how many pizzas we can make with the amount of each ingredient. We get the ratio of each ingredient to one pizza to determine how many we can make:

<u>Flour:</u>

Available: 200,000g

Needed: 400g

200,000g\ of\ flour\times\dfrac{1\ pizza}{400g\ of\ flour} = 500\ pizzas

<u>Yeast:</u>

Available: 5,000g

Needed: 10g

5,000g\ of\ yeast\times\dfrac{1\ pizza}{10g\ of\ yeast} = 500\ pizzas

<u>Cheese:</u>

Available: 100,000g

Needed: 250g

100,000g\ of\ cheese\times\dfrac{1\ pizza}{250g\ of\ cheese} = 400\ pizzas

<u>Basil:</u>

Available: 2,500g

Needed: 5g

<u />2,500g\ of\ basil\times\dfrac{1\ pizza}{5g\ of\ yeast} = 500\ pizzas<u />

<u>Sauce:</u>

Available: 60,000g

Needed: 120g

<u />60,000g\ of\ sauce\times\dfrac{1\ pizza}{120g\ of\ sauce} = 500\ pizzas<u />

<u>Oregano:</u>

Available: 2,500g

Needed: 5g

<u />2,500g\ of\ oregano\times\dfrac{1\ pizza}{5g\ of\ oregano} = 500\ pizzas<u />

We do not need to consider water, because it will provide as many as we will need.

So here we see that all but one ingredient is able to yield 500 pizzas. Cheese is the only one that yields less than 500, specifically 400 only. This is your limiting ingredient and this ingredient determines how many pizzas you can make. Because when you run out of cheese, you can no longer make a pizza.

4 0
3 years ago
Webster Corporation's budgeted sales for February are $318,000. Webster pays sales representatives a commission of 5% of sales d
Natali5045456 [20]

Answer:

The aggregate budgeted selling expense for the month of February amounts to $20,900

Explanation:

Selling expense budget is the plan which estimate the selling expense which happen in that period or year or month. It is related to the marketing as well as selling the product to customers. And involve advertising expense, commission, delivery cost and signs.

The aggregate budgeted selling expense for the month of February is computed as:

Aggregate budgeted selling expense = Commission + Monthly Salary of Sales manager + Advertising expense

where

Commission is as:

Commission = Sales × 5%

= $318,000 × 5%

= $15,900

Monthly Salary of Sales manager is $3,700

Advertising expense is $1,300

So,

Aggregate budgeted selling expense = $15,900 + $3,700 + $1,300

Aggregate budgeted selling expense = $20,900

8 0
3 years ago
A local company makes athletic clothing and they are preparing aggregate production plans on a quarterly basis for the coming ye
My name is Ann [436]
I think is is 125 hope its right
3 0
3 years ago
The primary goal of social business is to deepen interactions with employees and customers. True False
ivanzaharov [21]

Answer:

True

Explanation:

  • As in order to spread the interaction and to diversify the market, the primary goals s to deepen the social interaction among the members of the thereby interaction with the employees and the customers and hence this will lead to the increase in the profits.
6 0
3 years ago
If d0 = $1.75, g (which is constant) = 3.6%, and p0 = $40.00, what is the stock's expected total return for the coming year?
Orlov [11]

Answer:

The answer is <u>"a. 8.13%".</u>

Explanation:

Given that;

d0 = $1.75

p0 = $40.00

g = 3.6% = 0.036

By using the formula;

Price of the stock = (Dividend this year)(1+g) ÷ (r - g)  

By putting the values;

40 = (1.75)(1+0.036) ÷ (r - 0.036)

r - 0.036 = (1.75)(1.036) ÷ 40

r - 0.036 = 1.813 ÷ 40

r - 0.036 = 0.045325

r = 0.045325 + 0.036

r = 0.081325 = 0.081325 x 100

<u>r = 8.13%</u>

4 0
3 years ago
Read 2 more answers
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