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Ahat [919]
3 years ago
11

A firm is evaluating a proposal which has an initial investment of $50,000 and has cash flows of $15,000 per year for five years

. The payback period of the project is ________.
Business
1 answer:
Harlamova29_29 [7]3 years ago
3 0

Answer:

3 1/3 years

Explanation:

Payback period is the time required for the inflows from a project to be equal to the initial outflow for the project. It is a key consideration in capital budgeting. It is usually assumed that the outlay or initial outflow is made in year 0 and the first inflow comes in after a year.

Year       Cash outflow      Cash inflow           Balance

0                ($50,000)                   -                ($50,000)

1                         -                   $15,000           ($35,000)

2                        -                    $15,000          ($20,000)

3                        -                    $15,000           ($5,000)

4                      -                      $15,000           $10,000

5                       -                    $15,000            $25,000

Hence the payback period

= 3 years and 5000/15000 * 12 months

= 3 years 4 months

= 3 1/3 years

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MacDonald​ Products, Inc., of​ Clarkson, New​ York, has the option of ​(a) proceeding immediately with production of a new​ top-
Romashka-Z-Leto [24]

Answer:

The EMV for option a is ​$5,679,100

The EMV for option b is ​$5,719,200

Therefore, option b has the highest expected monetary value.

Explanation:

The EMV of the project is the Expected Money Value of the Project.

This value is given by the sum of each expected earning/cost multiplied by each probability.

So

a) proceeding immediately with production of a new​ top-of-the-line stereo TV that has just completed prototype testing.

There are these following probabilities:

77% probability of selling 100,000 units at $610 each.

23% probability of selling 70,000 units at $610 each.

So

EMV = 0.77*E_{1} + 0.23*E_{2}

E_{1} = 100,000*610 = 6,100,000

E_{2} = 70,000*610 = 4,270,000

EMV = 0.77*E_{1} + 0.23*E_{2} = 0.77*(6,100,000) + 0.23*(4,270,000) = 5,679,100

​(b) having the value analysis team complete a study.

There are these following probabilities:

74% probability of selling 85,000 units at $720.

26% probability of selling 70,000 units at $720.

The cost of value engineering, at 120,000. So this value is going to be dereased from the EMV.

EMV = 0.74*E_{1} + 0.26*E_{2} - 120,000

E_{1} = 85,000*720 = 6,120,000

E_{2} = 70,000*720 = 5,040,000

EMV = 0.74*E_{1} + 0.26*E_{2} - 120,000 = 0.74*6,120,000 + 0.26*5,040,000 - 120,000 = 5,719,200

4 0
3 years ago
Inez is applying to renew her loan originator license. She has completed the application, provided proof that she has satisfied
Lunna [17]

Answer: She must continue to meet the minimum standards for license issuance.

Explanation:

Since Inez has completed the application, and also provided proof that she has satisfied the continuing education requirement, as well as paying for the renewal fee when she's applying to renew her loan originator license, it's also vital that she must continue to meet the minimum standards for license issuance.

The standards for license insurance should be met if not, she may not be able to renew her loan originator license. It should be hired that the provision of proof of continuing employment and a proof that she has no pending disciplinary issues from the previous licensing period isn't required in this case.

6 0
2 years ago
For Wilton Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $720,000 of factory labor cos
Phoenix [80]

Answer:

Amount of overhead debited to Work in Process Inventory is $364,000

Explanation:

Direct labor cost = Total labor cost - Indirect labor cost

Direct labor cost = $720,000 - $200,000 = $520,000

Overhead debited to Work in Process Inventory= 70% * Direct labor cost

=70% * $520,000

=$364,000

6 0
3 years ago
as the number of units manufactured increased from 100 to 200, manufacturing cost (total) increased from $350 to $650. assume th
Dennis_Churaev [7]

Consequently, the linear equation y=3x+50 connecting the total cost to the quantity produced.

<h3>What are Manufacturing Costs?</h3>

The manufacturing cost is the sum of all expenses incurred in the production of a good. The three categories of cost of manufacturing are direct costs of material, direct labor, & manufacturing overhead. It affects the overall cost of delivery. The costs directly associated with creating the product are known as manufacturing costs. The per-item cost of doing business must be calculated taking into account both production costs and manufacturing costs.

<h3>Why is manufacturing cost important?</h3>

Costs of production have a significant impact on the efficient design and production of a product. The added value model states that a profit can only be made when the cost of production is less than the value added. Therefore, a product's success depends on knowing how much it will cost to design and manufacture.

<h3>Briefing:</h3>

A linear equation is of the form

y = mx+b

where b is the value at x=0 and m is the slope (rate of change of y with respect to x).

With the information provided, the price rose by $650-$350=$300 when the quantity produced rose by 200-100=100. Therefore, 300/100=3 represents the rate of change of cost (y) in relation to x (number of units).

So the equation is of the form

y = 3x+b

To calculate b, choose one of the two available data points.

When 100 units were produced, the total cost was $350:

350 = 3(100)+b

350 = 300+b

b = 50

The equation y=3x+50, which connects the total cost to the quantity produced, provides the right answer.

To know more about Manufacturing Cost visit:

brainly.com/question/28499890

#SPJ4

6 0
1 year ago
Suppose the government imposes a $10 per month tax on cell phone service. If the demand curve for cell phone service is perfectl
dlinn [17]

Answer:

c. $10.

Explanation:

Suppose the government imposes a $10 per month tax on cell phone service. If the demand curve for cell phone service is perfectly inelastic and the supply curve is upward-sloping, the monthly price for <u>cell phone service will increase by $10.</u>

As given, the government imposes a $10 per month tax on cell phone service, which means the price of cell phone services will be costlier and increases, however, the demand curve for cell phone service is perfectly inelastic, which mean price of the product does not have any impact on the demand of the product. Then it is given the supply curve is upward sloping, which reflects the higher price of cell phone service is needed to cover the higher marginal cost of production. Therefore, the monthly price for cell phone service will increase by $10.

6 0
3 years ago
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