Answer:
It is more profitable to sell the units as-is and produce new ones.
Explanation:
Giving the following information:
The company has 22,000 defective units that cost $6 per unit to manufacture.
Sell as-is:
Selling price= $2
Rework:
Additional cost= $4.5
Selling price= $8.5
If the units are sold as-is, the company will be able to build 22,000 replacement units for $6 each and sell them at the full price of $8.50 each.
<u>The original cost of the 22,000 units is a sunk cost, it will remain no matter the decision. </u>
Sell as-is:
Defective units= 22,000*3= 44,000
New units= 22,000*(8.5 - 6)= 55,000
Total income= $99,000
Rework:
Sales= 22,000*(8.5 - 4.5)= $88,000
It is more profitable to sell the units as-is and produce new ones.
Answer:e. $3,700 gain.
Explanation:
Par value of Bonds =$100,000
Unamortized premium= $2,700
Carrying/ Book value of bonds= Par value of Bonds +Unamortized premium
= $100,000 + $2,700 =$102,700
Amount at which bonds retired $100,000 x 99% = $99,000
Gain on retirement of bonds =Book value of bonds- Amount at which bonds retired
=$102,700- $99,000 = $3,700
Answer:
Payback =1.53 years
Explanation:
The annual cash-flow figure that is to be used in this calculation should not include depreciation as depreciation is a non-cash item. Net operating income from the project is $115,000 and to get to annual cash-flows, depreciation should be added back.
Annual cash-flows for each of the 6 years would therefore be:
The scrap value would be expected at the end of the project i.e end of year 6.
Year Cash-flow Balance
0 (225,000) (225,000)
1 147,000 (78,000)
2 147,000 69,000
By end of year 2, the company has already recovered the $225,000 initial investment as seen through the positive cumulative balance
Payback = Years With Negative Cumulative Cash-flow Balance + 
Answer:
it shouldn't violate historic cost principal because it is not going to shut down it's business so therefore it should value the assets on the market price not on the cost of purchase price
Explanation:
above is the explanation,you should think of the answers and so doing your hw from this app.
Answer:
the underground economy
Explanation:
Gross domestic product is defined as the monetary value of all goods and services that a country produces within a given period.
It is estimated by using income, expenditure, and production in markets.
However GDP does not consider the underground economy.
The underground economy is made up of transactions that are considered illegal or that do not meet up to the reporting requirements of the government.
In effect these are not reported in GDP so GDP is understated.
