He should consider where he is going to get the money from, how soon he will be able to pay it back if he borrowed it, and if he needs anymore emplyees for the expansion.
Answer and Explanation:
The computation is shown below:
a. Holding period return would be
= Income + (End of Period Value - Initial Value) ÷ Initial Value
= 0 +($2,178 - $1,902) ÷ $1,902
= 0 + $276 ÷ $1,902
= 14.51%
b. The annual percentage rate is
For 3 months, the rate is 14.51%
Now
For 12 months, it is
= 14.51% ÷ 3 × 12
= 14.51 % × 4
= 58.04%
c. The effective annual rate is
= ( 1 + r ÷ m)^m - 1
= (1 + 58.04% ÷ 4)^4 - 1
= (1 + 0.5804 ÷ 4)^4 - 1
= (1 + 0.1451)^4 - 1
= (1.1451)^4 - 1
= 1.719387079 - 1
= 0.719387079 or 71.94%
Answer:
Make since the relevant cost to make it is $62.20.
Explanation:
There is an option below the question ask for details
The computation of the total product cost is shown below:
= Direct material per unit + Direct labor per unit + Overhead cost per unit
where,
Overhead cost per unit would be
= Overhead cost per unit × remaining percentage
= $44 × 65%
= $28.6
All the other items values would remain the same
Now put these values to the above formula
So, the value would equal to
= $8.80 + $24.80 + $28.6
= $62.20
Since the given total product cost is more than the computed one so the company will choose make option and for decision making we take only 65% which is relevant
Answer:
$98,222
Explanation:
The computation of the free cash flow is shown below:
= Cash flow from Operating activity - purchase of equipment - payment of dividend
= $198,327 - $65,122 - $34,983
= $98,222
Simply we deduct the purchase of equipment amount and the dividend payment from the cash flow from operating activity so that the accurate amount can come.
All other information which is given is not relevant. Hence, ignored it
The purchase of equipment is the capital expenditure
