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diamong [38]
2 years ago
15

BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to

bid on jobs that it currently isn’t equipped to do. Estimates regarding each machine are provided below.
Machine A Machine B
Original cost $76,700 $183,000
Estimated life 8 years 8 years
Salvage value 0 0
Estimated annual cash inflows $20,200 $40,500
Estimated annual cash outflows $5,040 $9,870
a. Calculate the net present value and the profitability index of each machine. Assume a 9% discount rate. (Round net present value to 0 decimal places )
b. Which machine should be purchased?
Business
1 answer:
suter [353]2 years ago
8 0

Answer:

a) For MACHINE A  

Net Present Value (NPV) 7208

Internal Rate of Return (IRR) 11,48%

For MACHINE B      

Net Present Value (NPV) -13468

Internal Rate of Return (IRR) 6,99%

b)BAK Corp should buy MACHINE A

Explanation:

We use excel or a spreadsheet to calculate net present value and the profitability index of each machine. See document attached.

We use a cash flow to solve this problem.

At moment 0 we have the investment cost , in this case Original cost $76,700 $183,000 for Machine A and Machine B . From period 1 to period 8, we have inflows and outflow. (Estimated annual cash inflows $20,200 $40,500  

Estimated annual cash outflows $5,040 $9,870).

Then, we calculate the Net cash flow that is the difference between benefits and cost.

We use all the result (positive and negative) in Net cash flow to get the profitability index, IRR.  

Download xlsx
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Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda. when he arrived he disco
inysia [295]
The answer is The income effect. 
Income effect is described as the change in demand of a service or good brought on by change in the income of a consumer.It is observed in two cases first is when income of person increases and second is when price of goods or service decreases. 
The scenario given in the question is an example of second case as the price of burger was less than normal Steve perceived his income to be able to buy more product in same price
8 0
3 years ago
During the first year of operations, a company sold $113,000 of goods to customers and received $96,500 in cash from customers.
Oksi-84 [34.3K]

Answer:

Net Income for the year is $41700

Explanation:

The accounting basis that is generally followed by the businesses is the accrual basis of accounting. The accrual principle states that incomes and expenses should be recorded and recognized in the period to which they relate to rather than in the period where cash is received or paid.

This means that we will record income and expenses related to this year in this year's profit calculation even when we have not received or paid cash for such incomes and expenses.

Thus, net income for this year will be calculated as,

Net Income = Total Sales Revenue - Total expenses

Net income = 113000 - 71300    

Net Income = $41700

6 0
3 years ago
Which one of the following is a working capital decision?A. How should the firm raise additional capital to fund its expansion?B
svetoff [14.1K]

Answer:

The correct answer is letter "E": How much cash should the firm keep in reserve?

Explanation:

Working capital decisions imply working in capital cycles. They take into consideration interest rates, debtors management, and the company's financing in the short run. The working capital decisions also ensure that the organizations have enough cash to pay its bills and determine how much of the cash flow should be stored in the firm's reserve.

4 0
3 years ago
The owner of the business where you work has asked for your advice on restructuring the organization. You know that customer ser
ehidna [41]

Answer:

Flatter structures are appropriate for organizations that empower employees to solve customer problems.

Explanation:

These are the options for the question below;

✓A taller structure will improve the speed at which decisions are implemented.

✓Flatter structures are appropriate for organizations that empower employees to solve customer problems.

✓With a tall structure, supervisors can avoid hearing about customer complaints.

✓A flatter structure will further centralize decision making.

From the question, we are informed about an instance, where The owner of the business where i work has asked for your advice on restructuring the organization. Since I know that customer service is the cornerstone of the company. In this case I will recommend Flatter structures which is the best structure for organization that give empowerment to their employees in order to be able to solve problems associated with customers.

Flatter structure in an organization can be regarded as a structure that posses limited level of management or no level existing between the staff employee and the management of the organization. Flatter structure gives little supervision to the employees though it brings in their involvement when it comes to decision making

.

4 0
2 years ago
What kinds of questions do you ask during an interview
Lorico [155]

Answer:

A) what are the day to day responsibilities of the job

Explanation:

You need to know as much as possible of the position responsibilities but you dont know to know it all in the first interview.

5 0
3 years ago
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