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shepuryov [24]
3 years ago
8

The Higgins Company has just purchased a piece of equipment at a cost of $120,000. This equipment will reduce operating costs by

$40,000 each year for the next eight years. This equipment replaces old equipment which was sold for $8,000 cash. The new equipment has a payback period of:A. 8.0 yearsB. 2.8 yearsC. 10.0 yearsD. 3.0 years
Business
1 answer:
Maru [420]3 years ago
3 0

Answer:

B. 2.8 years

Explanation:

Initial investment = -120,000+ 8,000 = -112,000

Yr 1 cash inflow = 40,000, hence net CF = 40,000-112,000 = -72,000

Yr 2 cash inflow = 40,000, hence net CF = 40,000- 72,000 = -32,000

Yr 3 cash inflow = 40,000, hence net CF = 40,000-32,000 = 12,000

Payback period = last year with negative net CF + (absolute net CF that year/ total CF the following year)

= 2 + (32,000/40,000)

= 2 + 0.8

= 2.8 years

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Company expects to sell 1 comma 500 units of finished product in January and 1 comma 750 units in February. The company has 180
alina1380 [7]

Answer:

2720 units; 1806 units

Explanation:

Ending Inventory in February = 80% x 1820 = 1456 units

Ending Inventory in January = 80% x 1750 = 1400 units

Budgeted production in January = Budgeted sales in Jan + Ending Inventory in Jan - Begining Inventory in Jan = 1500 + 1400 - 180 = 2720 units

Budgeted production in February = Budgeted sales in Feb + Ending inventory in Feb - Begining Inventory in Feb = 1750 + 1456 - 1400 = 1806 units

6 0
2 years ago
Assume that a 10-year Treasury bond has a 12% annual coupon, while a 15-year T-bond has an 8% annual coupon. Assume also that th
Lady bird [3.3K]

Answer:

A)If interest rates decline, the prices of both bonds will increase, but the 15-year bond would have a larger percentage increase in price.

TRUE

As it has more time to maturity it will have a higher time expose to the rate therefore, will be more volatile against the rate fluctuations

Explanation:

The 10-year ond is issued at premium, above par as the coupon rate 12% is higher than market rate 10%. Each year will decrease the market value to come closer to maturity date.

The 15-year ond is issued at discount, below par as the coupon rate 8% is lower than market rate 10%. Each year will increase the market value to come closer to maturity date.

3 0
3 years ago
__________ refers to messages sent through human actions and behavior rather than through words.
Valentin [98]

Answer:

Nonverbal Communication

5 0
3 years ago
Black Diamond Company produces snowboards. Each snowboard requires 2 pounds of carbon fiber. Management reports that 5,000 snowb
Nonamiya [84]

1.Based on the information given the production budget for the third quarter is 148,500.

2. Budgeted cost of direct material purchases is 4,425,000.

3. Budgeted Direct labor cost is $1,485,000.

4. Total  factory overhead is $2,376,000.

1. Budgeted production

BLACK DIAMOND COMPANY

Production Budget (in units) Third Quarter

Budgeted units sales 150,000  

Add: Budgeted ending inventory 3,500  

Less: Budgeted beginning inventory (5,000)

Budgeted production 148,500

2. Direct material budget

BLACK DIAMOND COMPANY  

Direct Materials Budget Third Quarter  

Budgeted production  148,500 units

Materials requirement per unit 2  

Materials needed for production 297,000

(148,500units×2)

Budgeted ending inventory 4,000  

Total material requirements(lbs.) 301,000

(297,000+4,000)

Budgeted beginning inventory 6000  

Direct Materials to be purchased (lbs.) 295,000

(301,000-6,000)

Materials price per pound 15.00per  

Budgeted cost of direct material purchases 4,425,000

(295,000×15 per)

3. Direct labor budget

BLACK DIAMOND COMPANY  

Direct labor  Budget Third Quarter

Budgeted Production             148,500

Budgeted Direct labor hours  74,250

(148,500×0.5)      

Budgeted Direct labor cost  $1,485,000

(74,250×$20)  

4. Factory overhead budget

BLACK DIAMOND COMPANY  

Factory Overhead Budget Third Quarter

Variable overhead                    $594,000

(74,250×$8)

Add Fixed overhead                $1,782,000

Total  factory overhead           $2,376,000

Learn more here:brainly.com/question/16381677

8 0
3 years ago
Select the correct answer.
brilliants [131]

Answer:

C. Thank you for meeting me last Monday and considering me for the assistant librarian position.

Explanation:

6 0
2 years ago
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