Answer:
$90,900
Explanation:
Cost of truck = $303,000
Expected millage = 114,000 miles
Residual value = 0
Millage cover in first year = 34,000 miles
Depreciation is the systematic allocation of cost to an asset based on usage.
The depreciation of this truck is based on the millage covered. Hence the depreciation to be recognized in the first year
= (34,000/114,000) × 303,000
= 0.30 × 303,000 (intermediate calculations rounded to two decimal places)
= $90,900 (to the nearest dollar)
I dont really think there is a benefit.
Answer:
(i) $4,000,000
(ii) $3,840,000
Explanation:
(i) Contribution to income from selling the logs for log cabin construction:
= Large trees receive each period × per-unit price of logs
= 8,000 × $500
= $4,000,000
(ii) Contribution to income from processing the logs into lumber:
= Large trees receive each period × each log can be processed (feet) × (Selling price of lumber per board foot - Additional cost per board foot)
= 8,000 × 800 × (0.75 - 0.15)
= $3,840,000
(iii) Jack's continue to sell the logs only, because income from processing it as lumber is lower than log.
Answer:
c) understand the parts of the firm's operation that create value and those that do not.
Explanation:
Value chain analysis (VCA) is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.
Value chain represents the internal activities a firm engages in when transforming inputs into outputs.
Value chain analysis is a strategy tool used to analyze internal firm activities. Its goal is to recognize, which activities are the most valuable (i.e. are the source of cost or differentiation advantage) to the firm and which ones could be improved to provide competitive advantage. In other words, by looking into internal activities, the analysis reveals where a firm’s competitive advantages or disadvantages are. The firm that competes through differentiation advantage will try to perform its activities better than competitors would do. If it competes through cost advantage, it will try to perform internal activities at lower costs than competitors would do. When a company is capable of producing goods at lower costs than the market price or to provide superior products, it earns profits.
Answer:
free cash flow is 2.352 million
Explanation:
Given data:
operating income is $2.30 million
depreciation $1.20
tax rate is 25%
free cash flow is calculated by using below formula
free cash flow = operating income ( 1- Tax) + depreciation - fixed working capital
= 2.75( 1 - 0.25) + 1.20 - 0.6
= 2.352 million
free cash flow is 2.352 million
