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Olin [163]
3 years ago
15

Granite Construction Company is considering selling excess machinery with a book value of $175,000 (original cost of $315,000 le

ss accumulated depreciation of $140,000) for $180,000, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $200,000 for four years, after which it is expected to have no residual value. During the period of the lease, Granite Construction Company’s costs of repairs, insurance, and property tax expenses are expected to be $34,400. a. Prepare a differential analysis, dated November 7 to determine whether Granite should lease (Alternative 1) or sell (Alternative 2) the machinery.
Business
1 answer:
aleksandr82 [10.1K]3 years ago
5 0

Answer:

Sell option is preferred.

Explanation:

The decision whether to lease out the machinery that is surplus to requirement or sell outrightly is dependent on the differential analysis performed below.In the analysis I have compared the profits under each option in order to guide the final decision:

Differential analysis as at 7th November(Sale or lease option)                      

                                                                         Sell option              lease option

revenue   from sell/lease option                        $180,000                 $200,000

Brokerage commission(5%*$180,000)                 ($9,000)                        -

costs of repairs,insurance and property taxes          -                        ($34,400)

Profits                                                                        $171,000              $165,600

The sell option provides $5400($171,000-$165,600) than the lease option,hence the sell option is preferred.

One would have expect that the lease option since it has more revenue to preferable but the costs of repairs,insurance and property taxes were also on the high side

   

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The Tangier Company is considering eliminating the following product line: Product AXP Sales $ 49,000 Less variable costs: Raw m
sveticcg [70]

Answer:

$38,100

Explanation:

For avoidable cost, they are example of relevant cost. When a decision is taken , some costs are incurred in connection with such decision, they are known as avoidable cost.

The direct costs associated with a decision to produce are avoidable costs, which entails that such costs will not be incurred should Tangier company decides not to produce.

Therefore, the avoidable cost of Tangier is

= Raw materials cost + Direct labor cost

= $29,500 + $8,600

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4 0
2 years ago
Artur, who has a disability, is an employee of banquet & event facilities & services, inc. after the installation of new
Verdich [7]

<em>Incomplete question. </em><em>Here's the full part of the question:</em>

<em>*Artur, who has a disability, is an employee of banquet & event facilities & services, inc. after the installation of new doors on the entrance to banquet's hall, artur finds it nearly impossible to enter and exit. for repeatedly failing to be on time, banquet replaces artur with carter, who does not have a disability.</em>

<em>Refer to Fact Pattern 18-2. To successfully defend against Artur's claim, Banquet will have to show that:"</em>

Answer:

<u>Banquet cannot make changes to the doors without undue hardship to Artur</u>

Explanation:

Their defense is only reasonable if they claim that it acted in the best interest of Artur to replace him since it cannot make changes to the doors without causing him undue hardship because of his disability. Thus the decision was taken to avoid putting him under immense stress.

7 0
3 years ago
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BlackZzzverrR [31]

Answer:

Register copyrights, trademarks, and patents.

Explanation:

Copyright GIVES protection of tangible and intangible creative works. The moment you create something, you are the owner. However, you will have proof if you register your work.

the same goes with trademarks and patents.  Register so that you will have proof of creation.

3 0
2 years ago
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grigory [225]

Answer:

True

Explanation:

It is true because if you right something that is not the full thing you might not know what the actual answer is (it has happened to me before multiple times)

5 0
2 years ago
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Which option best describes a trustworthy person? A. a dependable person B. an honest person C. a person who has never harmed ot
gladu [14]

Answer:

A.

Explanation:

A trustworthy person is one who can be relied on and be trusted by other people in many things such as keeping secret, helping people, etc. This requires many characteristics such as honesty, positiveness or being considerate, kind and compassionate.

Although honesty is one characteristic needed to be a trustworthy person, this is not enough for being considered trustworthy, so that B is eliminated.

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The last answer has totally different meaning from a trustworthy person. Sharing values just help make people in a relationship understand each other, does not mean reliable.

3 0
3 years ago
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