All categories

3 years ago

Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below:

Business

1 answer:

Y_Kistochka [10]3 years ago

4 0

Answer:

1. $35,830

2. B) No, since ROI will be lowered.

3. $13 per DL

Explanation:

1. Present value of inflows = $146,000*Present value of annuity factor (10%,6)

Present value of inflows = $146,000 * 4.355

Present value of inflows = $635,830

Net present value = Present value of inflows - Present value of outflows

Net present value = ($635,830 - $600,000)

Net present value = $35,830.

So, the net present value for Project Nuts is $35,830.

2. ROI = Net income / Investment

ROI = (100000-60000-40000) / 150000

ROI = 0%

The ROI required is 25%. Hence, the new project should not be accepted as ROI will be lowered.

3. Direct labor price Variance = Actual hours (AR - SR)

$10,500 = 10,500 (AR - $12)

$10,500 = 10,500 AR - $126,000

AR = $10,500 + $126,000 /10,500

AR = $13 per direct labor hour.

So, the actual rate of pay for direct labor is $13 per DLH.

You might be interested in

Which of the following statements is true? Multiple Choice Passively managed funds do not pay dividends. Passively managed funds

VMariaS [17]

Answer:

Actively managed funds constantly buy or sell assets to generate better returns.

3 0

4 years ago

Dynamic Services Company purchased computers that are to be used in its consulting services. Based on the matching principle, t

Nina [5.8K]

Answer:

B. Depreciation Expense - Equipment

Explanation:

As according to the matching principle all the revenues should be matched against some expense,

As for the asset called computer is purchased for its consulting services, which will generate revenue, as for that some expense has to be charged against such revenues.

For this the cost of asset is provided as a depreciation expense in income statement, as proportionate to the use of equipment in current year for generating consulting services.

Correct answer is:

B. Depreciation Expense - Equipment

8 0

3 years ago

Buffalo in the United States almost became extinct while cattle, an animal that provides similar products, never has been close

disa [49]

Answer:

The greater marginal value of a buffalo relative to a steer, leading to the over harvesting of buffalo.

Explanation:

Marginal value looks at the increased amount of value that can be achieved by providing an additional source of output. So as the marginal value of Buffalo relative to a steer increases, people tends to over harvest it leading to its extinction.

3 0

4 years ago

The Income Summary account, for Wise Tools appears below. Based on the data contained in the account, determine which of the sta

NikAS [45]

Answer:

Wise Tools will report a $1,000 net loss for the period ending 12/31.

Explanation:

Calculation to determine which of the statements about Wise Tools is correct

Revenues $45,000

Less Expenses ($51,000)

Less Beginning Inventory ($4,000)

Add Ending inventory $9,000

Ending Net Loss -$1,000

Therefore the correct statements Wise Tools is:

Wise Tools will report a $1,000 net loss for the period ending 12/31.

7 0

3 years ago

_________ is formed when a firm entering a market pools its resources with those of a local firm. (more control, more risk relat

telo118 [61]

Answer:

Joint venture

Explanation:

Typically , joint venture is formed in order to:

- Pursue a new emerging market

To pursue an emergency market, two companies who operate in a similar industry can join their resources to face off larger competitors. Even though they might lose a little bit of control over the business, the profit that obtained from beating their competitors might be enough to cover the inconvenience

- increase the efficiency of their operation

Sometimes, companies also create a join venture because both parties involved have infrastructure that complement each others. Rather than purchasing new assets, creating a joint venture might be a cheaper option.

- Reduce the Risk of the operation

Creating a joint venture will also cut of the percentage of the profit that each parties initially obtain. But, the risk from potential loss will also be divided between each parties involved in the joint venture.

5 0

3 years ago