Answer:
Lancashire Railway Company (LRC)
Lancashire Railway Company (LRC) should reject the project. The basis for rejecting Division H's project is that its return (12%) is less than the risk-based cost of capital for the division (14%).
Explanation:
a) Data:
Division L's weighted-average cost of capital = 8%
Division H's weighted-average cost of capital = 14%
Weight of Division L = 50%
Weight of Division H = 50%
Company composite weighted average cost of capital = 11% (8% * 50%) + (14% * 50%)
Expected return from a proposed project for Division H = 12%
Answer:
c. $930.11
Explanation:
N =25
I =?
PV = -925
PMT = 85
FV = 1000
I = 9.28%
N = 20
I = 9.28%
PV = ?
PMT = 85
FV = 1000
Therefore, The price in 5 years from now will be $930.11
M2 will not be affected, but M1 will increase.
Answer:
the Work in Process Inventory account
Explanation:
The journal entry to record the manufacturing overhead costs applied to the cost of production includes -
Debit Work in Process Inventory account XXXX
Credit Manufacturing overhead XXXX
As the work is in progress, it cannot be a finished goods inventory or even a cost of goods sold account. Again, raw materials inventory will not come here as manufacturing overhead costs assigned to the cost of production. Therefore, option C is correct.
answers:
the financial advantage = 4,341 dollars
given that there is an advantage, then the project has to be accepted.
Explanation:
total incremental revenue from the 14 bracelets = 14 x 363 = $5082
direct material = 8 x 14 = 112
overhead = 12 x 14 = 168
we have the additional expense for this tool to be 461 dollars
for the special filigree that is to be attached to this bracelet e have
112 + 168 + 461 = $741
a. the financial advantage of accepting this = 5082 - 741 = 4341 dollars
b. given that there is a financial advantage then it is better that this order is accepted.
