1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
sergij07 [2.7K]
3 years ago
10

Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7

.3 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $10.1 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.3 million to build, and the site requires $880,000 worth of grading before it is suitable for construction.
Required: What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Do not include the dollar sign ($). Enter your answer in dollars (e.g., 1,234,567), not millions of dollars.)
Business
1 answer:
mojhsa [17]3 years ago
6 0

Answer:

The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project will be $32,280,000.

Explanation:

Proper year zero cash flow to use in evaluating this project = After-tax value of the land + Cost of manufacturing new plant + Grading Expenses

= $10,100,000 + $21,300,000 + $880,000

= $32,280,000

Therefore, The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project will be $32,280,000.

NOTE :

- The after-tax value of the land of $10,100,000 should be considered since it is an opportunity cost of capital if the land is used rather than sold.

- The cash outlay of $21,300,000 for the plant cost and the $880,000 for the grading costs are the part of the initial investment in year 0.

You might be interested in
Gary lives in an area that receives high rainfall and thunderstorms throughout the year. Which device would be useful to him to
jekas [21]

What are the options?
6 0
3 years ago
Read 2 more answers
The _____ is responsible for understanding the advertiser's marketing and promotional needs and interpreting them to agency pers
Ganezh [65]
Your answer is account executive 
8 0
3 years ago
Read 2 more answers
Why are both non excludability and non rivalry important elements of public goods?
USPshnik [31]
Because all people ( the public ) can fully enjoy this good/service without competing for it.
7 0
3 years ago
3. A company manufactures two types of products: A and B. Three resources R1, R2, and R3 are required to make these products. a.
mojhsa [17]

Answer:

(i)The units of production of Product A and B (x and y) are the decision variables

(ii)Objective is to maximize profit

(iii)Objective function, Max P=20x+50y

(iv)The Contraints are:

8x+2y\leq500....(i)

2x+5y\leq400.......(ii)

3y\leq180

x>0, y>0

Explanation:

Let the number of Product A=x

Let the number of Product B=y

Each unit of product A requires 8 units of R1 and 4 units of R2.

Each unit of product B requires 2 units of R1, 5 units of R2, and 3 units of R3

The availabilities of resources R1, R2, and R3 are 500, 400, and 180

Since R1 \leq500,

Product A requires 8 units of R1 per production unit

Product B requires 2 units of R1 per production unit

Total Unit of R1 possible is given by the inequality: 8x+2y\leq500....(i)

Since R2 \leq400,

Product A requires 2 units of R2 per production unit

Product B requires 5 units of R2 per production unit

Total Unit of R2 possible is given by the inequality: 2x+5y\leq400....(ii)

Since R3 \leq180,

Product B requires 3 units of R2 per production unit

Total Unit of R2 possible is given by the inequality: 3y\leq180....(iii)

Since the manufacturer also makes a profit of $20 and $50 for products A and B, our objective is to maximize profit

Therefore: Objective function, Max P=20x+50y ......(iv)

5 0
3 years ago
During the current year, Central Auto Rentals purchased 60 new automobiles at a cost of $15,000 per car. The cars will be sold t
borishaifa [10]

Answer:

a. $0.20

b. $322,000

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset .

The amount of depreciation to be recognized for each mile that a rental automobile is driven

= ($15,000 - $6,000)/45,000

= $9,000/45,000

= $0.20

Total millage expected of the 60 cars before disposal

= 60 * 45,000 miles

= 2,700,000 miles

The total amount of depreciation expense that Central Auto Rentals should recognize on this fleet of cars for the year

= 1,610,000/2,700,000 * ($9,000 * 60)

= $322,000

4 0
2 years ago
Other questions:
  • Suppose that you own a video store that has total costs of $3,600 per month. If you charge $12 for each DVD you sell, how many d
    14·1 answer
  • Break-even analysis for a service company involves identifying the correct measure of a.direct labor for the unit of analysis. b
    9·1 answer
  • On January 1, 2021, G Corporation agreed to grant all its employees two weeks paid vacation each year, with the stipulation that
    11·1 answer
  • Admitting New Partners Myles Etter and Crystal Santori are partners who share in the income equally and have capital balances of
    7·1 answer
  • Jennifer Searcy, a single mother, has three dependent children. As of December 31, 2018, their ages were as follows: Sydney (7),
    7·1 answer
  • Who is responsible for maintaining property records and issuing marriage licenses?
    15·1 answer
  • If a society decides to produce consumer goods from its available resources, it is answering the basic economic question,
    14·1 answer
  • Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $199,200 of raw materials on credit
    12·1 answer
  • On January 1, 2021, Vacation Destinations issues $35 million of bonds that pay interest semiannually on June 30 and December 31.
    15·1 answer
  • Suppose Nick would like to invest $10,000 of his savings.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!