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2 years ago

Sunk costs:

Business

1 answer:

Vika [28.1K]2 years ago

8 0

Answer:

The correct answer to the following question is option C) this cost is ignored when evaluating alternatives .

Explanation:

Sunk cost which is also know as retrospective cost, where it can be described as a cost that business has already incurred and this cost cannot be recovered . These cost are usually ignored when decisions regarding future business are being taken , the reason behind this that the business will have to incurred this cost and it will remain the same no matter what decision is being taken .

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Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,500,000, has annual oper

Vika [28.1K]

Answer:

Desing A: 23,024,370‬

Desing B: 22,520,274.6

It should purchase desing B as the capitalized cost is lower.

Explanation:

We consider annuity for the overhauls and then, perpetuity to consider this incinerators will last indefinitely.

maintenance cost: 800,000 / 0.05 = 16,000,000

Overhaul:

The company will need to fund 1,250,000 every 5 years. We need to determinate the annuity to obtain this future value:

$FV \div \frac{(1+r)^{time} -1}{rate} = C\\$

PV 1,250,000

time 5

rate 0.05

$1250000 \div \frac{(1+0.05)^{5} -1}{0.05} = C\\$

C $ $ 226,218.498

Then at perpetuity:

$ 226,218.498 / 0.05 = 4,524,370

Desing A capitalized cost:

2,500,000 + 16,000,000 + 4,524,370 = 23,024,370‬

We do the same for Desing B:

investment: 5,750,000

maintenance: 600,000 / 0.05 = 12,000,000

overhaul:

$3000000 \div \frac{1-(1+0.05)^{-10} }{0.05} = C\\$

C $ 238,513.725

238,513.73/0.05 = 4,770,274.6

Capitalized cost: 5,750,000 + 12,000,000 + 4,770,274.6 = 22,520,274.6‬

8 0

3 years ago

Refer to the accompanying national income statistics (in billions of dollars). Personal income is Multiple Choice $317 billion.

Elden [556K]

Unclear question. I provided some information on national income statistics.

Explanation:

The national income statistics is an economic indicator that tells us the value of goods and services (as in this case in billion of dollars) produced by a country's economy.

Information about the national income statistics of a country is usually published by the World Bank; an internal financial institution.

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2 years ago

Which is of the following is NOT an example of a non profit organization?

OLga [1]

D) all of the answers

6 0

3 years ago

Your firm has a ROS of 14.3 percent. The company's goal is to increase sales by $417,963 this year. How much, in dollars, would

shusha [124]

Answer:

$59, 768.7

Explanation:

The ROS (Return on sales) of a company is a ratio used to evaluate a company's operations to how much profit they make per dollar of sales.

Since the company's goal is to increase sales by $417,963 this year they would need to reduce their logistics cost.

We use the formula

ROS =

Operating profit / (Net sales or expected Net sales)

We therefore substitute the formula:

The Operating profit= ROS X Net sales expected

14.3% x $417, 963 = $59, 768

7 0

3 years ago

Multiple Choice

Annette [7]

Answer:

can tell important information about education needed, how much demand there is for each job, and approximate pay rates.

Explanation:

4 0

3 years ago