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Sidana [21]
3 years ago
7

Turk Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investment

s. The present value factors of 1 at 15% are: 1 year, 0.8696; 2 years, 0.7561; 3 years, 0.6575. Which machine should Turk purchase
Business
1 answer:
Scrat [10]3 years ago
4 0

Answer:

E) Only Machine B is acceptable

Explanation:

The computation is shown below;

<u>For Machine A      </u>

<u>Year     Cash Flow     PV Factor     PV of Cash Flow   </u>

0          -$9,000               1              -$9,000    

1            $5,000          0.8696         $4,348    

2           $4,000            0.761            $3,044    

3            $2,000           0.6575       $1,315    

NPV                                                 -$293    

<u>Machine B      </u>

<u>Year      Cash Flow      PV Factor       PV of Cash Flow </u>  

0          -$9000                    1               -$9,000    

1            $1,000                  0.8696       $869.6    

2           $2,000                  0.761          $1,522    

3            $11,000                 0.6575       $7,232.5    

NPV                                                         $624.1  

As we can see that from the above calculations that the npv for machine A is in negative so the same should not be accepted but for machine the npv is in positive so the same should be accepted  

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Pani-rosa [81]

Answer:

Additions to Retained earnings        $78,040

Explanation:

The additions to the retained earnings of Sidewinder, Inc can be calculated as follows

Sales                                               $670,000

Costs                                              ($337,000)

Depreciation expense                   ($82,000)

Interest expense                            ($47,000)

Profit before tax                              $204,000

[email protected]%                                         ($48,960)

Profit after tax                                  $155,040

Less:Dividends                                ($77,000)

Additions to Retained earnings      $78,040  

4 0
4 years ago
Last year, you estimated you would earn $5 million in sales revenues from developing a new product. So far, you have spent $3 mi
luda_lava [24]

Answer:

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Explanation:

It is critical to recognize that $3 million already spent on developing the product is the sunk cost, which is irrelevant cost that should not be included in the budget further spend for the new product.

As the new product is expected to generate a revenues of $4 million, the further cost should be spent on the new product development should not be exceeded the $4 million.

Thus, the answer is b. Up to $4 million is the correct choice.

8 0
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Does this big data approach work for all three Gap Inc.'s primary brands: Old Navy, Gap, and Banana Republic? Why or why not? Wh
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Answer:

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Explanation:

8 0
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Answer:

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4 years ago
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