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Volgvan
3 years ago
12

An auto manufacturer is considering adding new automation to their assembly line to reduce production costs. The manufacturer is

confident that capital costs to get the new equipment "in service" will be $4,000,000, with a salvage value of $40,000 after a 9 year useful life. The manufacturer is less confident about the annual savings that will occur as a result of automation and cannot accurately assess the probability of the various outcomes. The manufacturer estimates the annual savings will be in the range of:
Pessimistic $460,000
Most likely $660,000
Optimistic $840,000
Required:
1. Using an MARR of 12%, and the Beta distribution, determine the mean NOW for the investment. Express your answer in $ to the nearest $1,000
Business
2 answers:
QveST [7]3 years ago
7 0

Answer:

Check the explanation

Explanation:

As per the beta distribution, the average revenue per year = (Pessimistic +4*Most Likely +Optimistic) / 6

Avg revenue per year = (460000 + 4*660000 + 840000) / 6 = 656666.67

MARR = 12%, life = 9 yrs

NPW = -4000000 + 656666.67 * (P/A,12%,9) + 40000 * (P/F,12%,9)

= -4000000 + 656666.67 * 5.32824 + 40000 * 0.36061

= 7498877.6+14424.4

= -433415.60

= -433000 (nearest 1000)

Rus_ich [418]3 years ago
4 0

Answer:

Answer: -6410000 (nearest 1000)

Explanation:

For the beta distribution, the average revenue per year =              (Pessimistic +4*Most Likely +Optimistic) / 6

Avg revenue per year = (460000 + 4*660000 + 840000) / 6 = 656666.67

MARR = 12%, life = 9 yrs

NPW = -4000000 + 656666.67 * (P/A,12%,9) + 40000 * (P/F,12%,9)

= -4000000 + 656666.67 * 5.32824 + 40000 * 0.36061

= -6409511.847

= -6410000 (nearest 1000)

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Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 2% of sales. Assume that sales w
motikmotik

Answer: Please see answer in explanation column

Explanation:

a)Account titles and explanation                  Debit                         Credit

Warranty Expense                                       $30,000

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Calculation :

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7 0
3 years ago
The long-run aggregate supply curve is vertical:
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Answer: Option(c) is correct.

Explanation:

The long run aggregate supply(LRAS) curve is vertical as resource prices eventually rise and fall with product prices.

When there is an increase in the price level of the output, so in the long run this will also result in an increases in the prices of the factors of production.

Hence, aggregate supply curve in the long run is vertical.

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7 0
3 years ago
During a period, an RV company purchased three vehicles for $33,000, $46,000, and $24,000, and sold two of them for $125,000. Us
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Answer: $68,000

Explanation:

If the inventory that remains is the $46,000 then that means that the cars costing $33,000 and $24,000 have been sold.

With specific identification, the actual prices of the stock are used so the cost of goods sold is:

= 24,000 + 33,000

= $57,000

The gross profit is therefore:

= Sales - Cost of goods sold

= 125,000 - 57,000

= $68,000

7 0
3 years ago
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