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pshichka [43]
3 years ago
15

A manufacturing company is considering a capacity expansion investment at the cost of $258,388 with no salvage value. The expans

ion would enable the company to produce up to 26,241 parts per year and the useful life of the additional capacity is seven years. Each part would generate $2.43 net profit and annual operating and maintenance costs are estimated at $28,599 per year. The market demand for the parts is unlimited, all parts produced will be sold. The MARR of the firm is 10%. The minimum annual production rate to make this investment justifiable is:

Business
1 answer:
Jobisdone [24]3 years ago
4 0

Answer:

33,610.42  units

Explanation:

For computing the minimum annual production rate first we have to determine the annual worth by using the PMT formula which is shown below:

Given that

Present value = $258,388

Interest rate = 10%

NPER = 7 years

Future value = $0

The formula is shown below:

= PMT(RATER;NPER;-PV;FV;type)

The present values comes in a negative

After solving this, the annual worth is $53,074.32

And, the annual operating maintenance cost is $28,599

So, the revenue should be

= $53,074.32 + $28,599

= $81,673.32

Now the minimum annual production rate is

= $81,673.32 ÷ $2.43

= 33,610.42  units

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Answer:

a complex approach that continually matches demand and supply to customize the price for a service.

Explanation:

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In sales and marketing, pricing of products is considered to be an essential element of a business firm's marketing mix because place, promotion and product largely depends on it.

One of the importance associated with the pricing of products is that, it improves the image of a business firm.

Yield management pricing is a complex approach that continually matches demand and supply to customize the price for a service. It is commonly used by businesses that are typically involved in tourism, hospitality, and airline services.

8 0
3 years ago
Ferris Corporation makes a powdered rug shampoo in two sequential departments, Compounding and Drying. Materials are added at th
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Answer:

Materials = 44,000

Conversion = 40,800

Explanation:

<em>Step 1 Determine the Number of Closing Work In Process Units</em>

Closing Work In Process Units = Opening Work In Process Units + Units started in process - Units transferred out

                                                   = 6,000 + 38,000 - 36,000

                                                   = 8,000

<em>Step 2 Determine the equivalent units for March 2019</em>

<u>Materials :</u>

<em>Note : Materials are added at the be-ginning of the process, therefore Units Transferred Out and Closing Work In Process are 100% complete in terms of materials</em>

Closing Work In Process Units - 100% =  8,000

Units transferred out - 100%                 = 36,000

Total equivalent units                           = 44,000

<u>Conversion :</u>

<em>Note : Ending work-in-process was 60% processed, therefore 60% completed in terms of conversion costs</em>

Closing Work In Process Units - 60%  =  4,800

Units transferred out - 100%                 = 36,000

Total equivalent units                           = 40,800

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3 years ago
A sales tax of $1 per unit of output is placed on one firm whose current equilibrium price is $5 and current equilibrium quantit
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Answer:

B

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B is the correct answer

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2 years ago
Production and sales estimates for April for Crane Co. are as follows: Estimated inventory (units), April 1 19,000 Desired inven
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Answer:

a. 11,000 units

Explanation:

Particulars                                                               Amount

Expected Sales (units)                                            12,000 [3000+4750+4250]

Add: Ending inventory                                          18,000

Less; Beginning inventory                                      <u>19,000</u>

Number of units expected to be manufactured <u>11,000 </u>

5 0
3 years ago
Assume that a firm hires an additional employee. If the marginal product for that employee is greater than for the previous empl
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If the marginal product for that employee is greater than for the previous employee hired, it must be that there are gains from specialization

<h3>What is marginal product ?</h3>
  • The marginal product or marginal physical productivity of an input (factor of production) in economics, and particularly neoclassical economics, is the change in output that results from using one more unit of a specific input (for example, the change in output when a firm's labor is increased from five to six units), assuming that the quantities of other inputs are kept constant.
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  • When more of one input, such as labor, is used while maintaining a constant level of the other input, such as capital, the marginal product initially rises according to the "rule" of declining marginal returns.

To learn more about marginal product with the given link

brainly.com/question/13623353

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8 0
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