Answer:
Harlose Suits owns more equipment than required for manufacturing goods during periods of regular demand in order to tackle sudden demand surges. It also has a certain reserve of produced goods to tackle material shortages. In this case, the reserve of equipment and produced goods are examples of <u>the</u> <u>capacity cushion</u>.
Explanation:
The capacity cushion is the amount of reserve capacity that a business keeps to manage sudden increases of demand or momentarily losses of production capacity.
Answer:
Check the explanation
Explanation:
Given details
1. Magna charter needs a plane for a time duration of 7 years, which can be taken on lease or bought from stellar leasing company
2. In the event that Magna charter has purchase the plane, it is qualified for depreciation, depreciation being the expense; it decreases the profit, then by profit amount.
3. Therefore tax savings on depreciation is the amount of cash inflow
4. correspondingly the lease rentals is expensive, consequently reducing the profit, thereby tax amount also.
5. Magna Charter will have to select the option that gives minimal cash out flows.
6. since the cash flows are in separate periods, & they cannot be compared, thus the cashflows are discounting to today's current value.
7. Discounting of Cash flows shall be done at post tax cost of debt, thus discount rate is 8% (10% * (1- 20%)) for Magna & 6% (10% * (1- 40%) ) for Stellar leasing company.
The diagrams in the attached images below explains Magna View point
Parametric estimation is a techniques that uses a statistical relationship to calculate cost or duration based on historical data and other project parameters
Parametric estimation is a quantitative method (statisitical relationship) used to estimate the project cost, resources, and duration based on historical data and other project parameters.
Parametric estimation models are used when:
- There is precedent
- The model is a unit hence can be scaled up
- The parameters required are easily quantifiable
While the other options of this question is incorrect because:
b. grass roots estimating
Cost estimation done by the individuals who will be performing the task being estimated.
c. empirical estimating
Estimation method in which the data is obtained using empirical formulas. It is usually based on an amalgamation of historical data, assumptions, guesses, and personal experience.
d. analogous estimating
Also called top-down estimating, this is a technique that involves comparing previous projects, personal experiences and cursory cross-referencing observed costs to estimate time resources required. This technique is most useful in the absence of quantifiable data.
You can learn more about project estimation at
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