Answer:
The maximum amount that the firm should invest in the project $695,603.10
Explanation:
The applicable formula in this scenario is the present value of an ordinary annuity,modified for timing of the cash flows,which is given below:
PV=A*(1-(1+r)^-N)/r
PV is the unknown
A is the periodic inflow of $10,000
r is the rate of return of 12.05% divided by 12 months i.e 12.05%/12=0.010041667
N is the number of years multiplied by 12 months i,e 10*12=120
PV=10000
annuity factor=(1-(1+r)^-N)/r
annuity factor=1-(1+0.010041667
)^-120/0.010041667
annuity factor=(1-0.301498531
)/0.010041667
annuity factor=69.56030996
PV=69.56030996
*10000
PV=$695,603.10
Answer: Its a phrase that gives examples of a certain relating subject.
Explanation:
Answer:
See below.
Explanation:
We can compute the profitability of this special order by accounting for the incremental costs,
Sales (9700 * 47.20) = $457,840
Incremental Variable costs = (18 + 7.30 + 4.50 + 6.90) = $36.7/unit
The incremental variable costs include the $6.9 for modifications and does not include 7.4 which is a part of non incremental fixed costs.
Profits from this special order are as follows,
Sales 457,840
Less:
Variable costs (36.7*9700) 355,990
Incremental Fixed costs 46,700
Profits from this special order 55,150
Since the order has positive contribution and as it yields profits, it should be accepted.
Hope that helps.
Answer:
$306,000
Explanation:
To determine manufacturing costs, consider only those cost that can be directly traced to the product manufactured and plant related costs.
<u>Total Manufacturing Cost Calculation :</u>
Factory Utilities $11,400
Indirect Materials $39,500
Direct Materials $166,400
Equipment Depreciation $47,000
Direct labor $91,700
Total Manufacturing Cost $306,000
