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3 years ago

The following costs and useful life data are associated with two new machines being considered at Arun Tech Inc.

Business

2 answers:

Sidana [21]3 years ago

6 0

Answer:

Machine B has a higher NPV therefore should be produced

Explanation:

The machine with the higher Net Present Value (NPV) should be produced .

NPV of Machine A

PV of cash flow

PV of annual profit = A × (1- (1+r)^*(-n)/r

A- 92,000, n- 11, r- 12%

PV = 92,000 × (1- (1.12^(-11)/0.12 = 546268.32

PV of salvage value = 13,000× 1.12^(-11)= 3737.189

NPV = 546268.320 + 3737.189 -250,000 = $300,005.50

NPV of Machine B

A- 103,00, n- 19, r- 12%

PV = 103,000 × (1- (1.12^(-19)/0.12= 758675.0165

Pv of salvage value = 26000× 1.12^(-19)= 3018.776199

NPV =758675.0165 + 3018.77 -460,000 = $301,693.79

Machine B has a higher NPV , therefore should be produced.

xenn [34]3 years ago

6 0

Answer:

While Machine B has an slightly higher net present value his annual worth is much lower than machine A therefore, the company should purchase machine A which yield better annual return

Machine A

Net Present Value: 300,005.00

Anual worth $ 50,525.463

Machine B

Net Present Value: 301.693,8‬

Anual worth $ 40,958.857

Explanation:

We calculate the present value of each machine

and also, the annual worth of each one to get a fair comparison considering their useful life differ

Machine A

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 92,000.00

time 11

rate 0.12

$92000 \times \frac{1-(1+0.12)^{-11} }{0.12} = PV\\$

PV $546,268.3202

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $13,000.00

time 11.00

rate 0.12000

$\frac{13000}{(1 + 0.12)^{11} } = PV$

PV 3,737.1894

Net Present Value:

$546,268.32 + $3,737.19 - $250,000 = 300.005,51‬

Annual worth:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 300,005.00

time 11

rate 0.12

$300005 \div \frac{1-(1+0.12)^{-11} }{0.12} = C\\$

C $ 50,525.463

Machine B

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 103,000.00

time 19

rate 0.12

$103000 \times \frac{1-(1+0.12)^{-19} }{0.12} = PV\\$

PV $758,675.0165

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $26,000.00

time 19.00

rate 0.12000

$\frac{26000}{(1 + 0.12)^{19} } = PV$

PV 3,018.7762

Net present value

$758,675.02 + $3,018.78 - 460,000 = 301.693,8‬

Annual worth

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 301,693.80

time 19

rate 0.12

$301693.8 \div \frac{1-(1+0.12)^{-19} }{0.12} = C\\$

C $ 40,958.857

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Written, Inc. has outstanding 600,000 shares of $2 par common stock and 120,000 shares of no-par 8% preferred stock with a state

Vitek1552 [10]

Answer:

$126,000

Explanation:

Given:

Total outstanding stocks = 600,000

Price per share of common stock = $2

Number of preferred stock = 120,000

Interest rate = 8%

Stock Value = $5

Outstanding year = 3

Total Amount of preferred stock = Principle × Rate × Time

Total Amount of preferred stock = ( 120,000 × $5 ) × 0.08 × 3 = $144,000

Since,

The preferred stock value is more than the amount distributed

Hence,

the total amount distributed i.e $126,000 will be received by the preferred stockholders

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3 years ago

At September 1, 2012, Baxter Inc. reported Retained Earnings of $272,000. During the month, Baxter generated revenues of $40,000

LiRa [457]

Answer:

$284,000

Explanation:

Movements in the retained earnings account are as a result of the payment of dividend and the addition of the income or loss for the year.

Given that

Baxter generated revenues = $40,000

incurred expenses = $24,000

purchased equipment = $10,000 and

paid dividends = $4,000

Net income/(loss) = $40,000 - $24,000

= $16,000

Retained Earnings at September 30, 2012

= $272,000 + $16,000 - $4,000

= $284,000

6 0

3 years ago

To build trust in a cooperative relationship, both firms can: a. write short-term contracts that must be renewed frequently. b.

Vilka [71]

Answer:

D) make mutual investments in specialized assets.

Explanation:

I'm not sure about the exact background of the question, but if you are trying to build a trust relationship with another company, the best way to do it is by investing together.

E.g. if company A is interested in securing an important supplier, instead of trying to acquire it, they might try to invest together in some assets or another business. That way, when it comes to deciding which company should receive discounts or prioritize their requirements, the supplier will always favor their business partners.

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3 years ago

The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet Sales $23,500 Assets $12

finlep [7]

Answer:

$20,370.5

Explanation:

Net Profit Margin = Net Profit / Sales= 5,168 / 23500 = 0.219915 = 21.99%

Dividend Payout Ratio = Dividends / Net profit = $1,560/$5,168 = 0.3018576 = 30.19%

Increase in Assets = Total Assets / Current Sales * Change in Sales

Increase in Assets = 121,000 /23,500 * (28,300-23,500)

Increase in Assets = 5.1489362 * 4800

Increase in Assets = $24714.89

Increase in Current Liabilities = Current Liabilities / Current Sales * Change in Sales = 0

Earnings Retained = Revised sales * Net profit margin * (1- dividend payout ratio)

Earnings Retained = $28,300 * 21.99% * (1 - 30.19%)

Earnings Retained = $28,300 * 0.2199 * 0.6981

Earnings Retained = $4344.39497

Earnings Retained = $4344.39

External Financing Needed = Increase in Assets - Increase in Current Liabilities - Earnings Retained

External Financing Needed = $24714.89 - $0 - $4344.39

External Financing Needed = $20,370.5

7 0

2 years ago

Which of the following refers to a process of developing distribution objectives, evaluating internal and external environmenta

german

Answer:

The correct answer is E. Distribution planning.

Explanation:

Distribution planning refers to the development of objectives from production to putting the product on the counter. This process includes the entire chain from when the raw material to produce is entered, and the logistics necessary to transport the product to the final supplier. This process must evaluate external and internal problems in order to make it as expeditious as possible and the times are met in order to avoid product shortages.

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3 years ago