I think it's B. not entirely sure
Answer:
The development should be not be considered as it not a relevant cash outflow
The $254,000 sale price for existing line is a relevant cash inflow
Cash flows:
Year 0 -$$1,536,000
Years 1-13 $746,000
Explanation:
The development cost has already been incurred,it is not a relevant cash outflow since the cash flows to be considered are those would be incurred in the future in respect of the new line of club heads.
The sale price of the existing line is a relevant inflow as it would only be received as a result of switching to the new line of club heads.
The relevant cash flow from year 1 to 13 is computed thus:
year 0 cash outflow would be the cost of new equipment less the sale price of existing line i.e -$1,790,000+$254,000=-$1,536,000
In years 1 to 13 ,there would cash inflow of $746,000 in each year
Answer:a
Explanation:
Cost of Trailer - $188,000
Salvage value $28,000
Useful life: 8 years
Depreciable amount - $160,000
Expected miles coverage - 352,000
Mileage in 2020 = 44,500
Mileage in 2021 = 41480
Depreciation rate = 1/8*100 = 12.5%
Straight line :
160,000/8 = 20,000 2020 2021
20000 20000
Units of production (44500/352000*160000) (41480/352000*160000)
20,227.27 18,854.54
Double declining 25%*188000 25%*141000
balance 47000 35250
Answer:
Explanation:when cash comes In bills hit you hard
Answer:
The business manager should assume that the building expense is fixed.
Explanation:
Fixed costs are not correlated with the revenue levels. Within the relevant range, fixed costs remain constant. They do not vary with the activity levels as variable costs do. For example, a manufacturer must pay for rent, repairs and maintenance, and utility bills irrespective of the revenue levels at which it is operating. This is why the business manager always discovers that the building expense each month does not correlate with the revenue levels, unlike the product's variable costs.