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Verizon [17]
3 years ago
12

Harris Co. is considering a 12-year project that is estimated to cost $900,000 and has no residual value. Harris seeks to earn a

n average rate of return of 15% on all capital projects. Determine the necessary average annual income (using straight-line depreciation) that must be achieved on this project for it to be acceptable to Harris Co.
Business
1 answer:
masha68 [24]3 years ago
3 0

Answer:

annual income = $70,292.52

Explanation:

initial outlay $900,000

in order to determine the net cash flows per year we can use the present value of an ordinary annuity:

PV = annual cash flow x annuity factor

  • PV = $900,000
  • annuity factor, 15%, 12 years = 6.1944

annual cash flow = $900,000 / 6.1944 = $145,292.52

annual cash flow = [(revenue - operating costs - depreciation) x (1 - tax rate)] + depreciation

  • revenue - operating costs - depreciation = annual income
  • tax rate = 0?
  • depreciation = $900,000 / 12 = $75,000

$145,292.52 = annual income + $75,000

annual income = $145,292.52 - $75,000 = $70,292.52

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d. there is a technological improvement.

Explanation:

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Bartoletti Fabrication Corporation has a standard cost system in which it applies manufacturing overhead to products on the basi
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Total of the variable overhead rate and fixed manufacturing overhead budget variances for the month = $9,096 Unfavorable

Explanation:

Actual variable overhead rate = \frac{Actual variable overhead}{Actual Hours} = \frac{66,170}{6,400}  = 10.34

Therefore variance with the budgeted standard variable overhead

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= ($9.70 - $10.34) \times 6,400 = -$4,096

And Fixed Overhead variance = Standard Fixed Overhead - Actual Fixed Overhead = $69,000 - $74,000 = -$5,000

Total of the variable overhead rate and fixed manufacturing overhead budget variances for the month = -$4,096 + -$5,000 = -$9,096

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Total of the variable overhead rate and fixed manufacturing overhead budget variances for the month = $9,096 Unfavorable

3 0
2 years ago
Bundle A is strictly preferred to bundle B, and bundle B is strictly preferred to bundle C. If the utility associated with B is
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Answer: (63, 50, 44)

Explanation:

Utility is the satisfaction that we derive as consumers when we consume or use a certain product.

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2 years ago
The chapter identifies three governing mechanisms for strategic alliances: non-equity, equity, and joint venture. List the benef
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2 years ago
Ed's Print Shop received an invoice dated May 10 for $2,500 with terms 3/10, 1/15, n/60. On May 22, Ed's Print Shop sent a parti
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Amount to be credited = $2,020

Outstanding balance = $480

Explanation:

The payment terms state that

  • 3% discount may be taken within 10 days of the invoice date (up to May 20); or  
  • 1% discount may be taken within 15 days of the invoice date (after May 20 but not later than May 25); or
  • The net amount is due within 60 days of the invoice date if advantage is not taken of the cash discounts offered.
  • The  3% cash discount is not applicable as the payment was made on May 22 which is after the end of the discount period. However, the 1% discount is allowed, since payment on May 22 is within the 15-day period for the 1% discount.

Amount to be credited

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= $2,020

Outstanding balance

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= $480

3 0
3 years ago
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