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Brrunno [24]
3 years ago
8

Renfroe Corporation is considering the purchase of a machine that would cost $22,712 and would have a useful life of 5 years. Th

e machine would generate $6,300 of net annual cash inflows per year for each of the 5 years of its life. The internal rate of return on the machine would be closest to: A) 12%. B) 14%. C) 8%. D) 10%.
Business
1 answer:
Dennis_Churaev [7]3 years ago
6 0

Answer:

option (A) 12%

Explanation:

Data provided :

Purchasing cost of the machine = $ 22,712

Useful life of the machine = 5 years

Net annual cash inflow generated per year = $ 6,300

Now,

at for the value for internal rate of return,

the present value of inflow = Present value of the outflow for the 5 years

let the internal rate of return be r%

thus,

$ 22,712 = \frac{6,300}{1.0r^1}+\frac{6,300}{1.0r^2}+\frac{6,300}{1.0r^3}+\frac{6,300}{1.0r^4}+\frac{6,300}{1.0r^5}

on solving the above relation, we get

r ≈ 12%

Hence, option A is correct

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Answer:

Results are below.

Explanation:

<u>First, we need to calculate the predetermined overhead rate:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Total number of direct labor hours= (1,000*2) + (2,000*7)= 16,000

Predetermined manufacturing overhead rate= 1,200,000 / 16,000

Predetermined manufacturing overhead rate= $75 per direct labor hour

<u>Now, we allocate overhead to each unit and calculate the unitary cost:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Mercon:

Allocated MOH= 75*2= $150

Unitary cost= 150 + 8 + 10= $168

Wurcon:

Allocated MOH= 75*7= $525

Unitary cost= 525 + 6 + 11= $542

<u>Finally, using activity-based costing:</u>

Mercon Wurcon Total

Engineering design time (in hours) 1,000 1,000 2,000

Direct labor-hours 2,000 14,000 16,000

Engineering= 600,000 / 2,000= $300 per design hour

Direct labor= 600,000 / 16,000= $37.5 per direct labor hour

Mercon:

Allocated MOH= 37.5*2 + 300*1= $375

Unitary cost= 375 + 8 + 10= $393

Wurcon:

Allocated MOH= 37.5*7 + 300*0.5= $412.5

Unitary cost= 412.5 + 6 + 11= $429.5

3 0
2 years ago
In its 2016 annual report, Lockheed Martin reported net earnings of $5,302 million and dividends paid of $2,048 million. Your fo
kakasveta [241]

Answer:

The dividend for 2017 will be = $2124.98

Explanation:

The net earnings for the year 2016 = $5302

Dividend paid for the year 2016 = $2048

The forecast for the income of 2017 = $5504

The projected dividend for the year 2017 = 5504 x (2047 / 5302)

The projected dividend for the year 2017 = 2124.98

The dividend for 2017 will be = $2124.98

6 0
3 years ago
The balance of the revenue account is transferred to the
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Credit side of a the balance of revenue account is transferred
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2 years ago
Managers organize information about a given job by performing a job analysis to determine the following with regard to that job:
Law Incorporation [45]

Answer:

All of the above.

Explanation:

Job analysis is when manager uses information available as a criteria for determining attributes required to perform a job.

In job analysis, information is made available to managers to know which employee is best suited for a particular role. It is also used to measure the capacity of employees whether they are being under or over utilized.

For effective job redistribution, job analysis is best recommended because it describes the work of current employee, working conditions and necessary educational certifications. Skills needed to perform on a role are also part of what is being considered in job analysis.

5 0
3 years ago
If a firm has economies of scale, increasing the quantity produced will lead to: multiple choice 1 higher long run average costs
xeze [42]

It results in lower short run average cost in economies of sale .

<h3>Economies of scale</h3>

Economies of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down. This is the idea behind “warehouse stores” like Costco or Walmart. In everyday language: a larger factory can produce at a lower average cost than a smaller factory. Figure 2 illustrates the idea of economies of scale, showing the average cost of producing an alarm clock falling as the quantity of output rises. For a small-sized factory like S, with an output level of 1,000, the average cost of production is $12 per alarm clock. For a medium-sized factory like M, with an output level of 2,000, the average cost of production falls to $8 per alarm clock. For a large factory like L, with an output of 5,000, the average cost of production declines still further to $4 per alarm clock.

One prominent example of economies of scale occurs in the chemical industry. Chemical plants have a lot of pipes. The cost of the materials for producing a pipe is related to the circumference of the pipe and its length. However, the volume of chemicals that can flow through a pipe is determined by the cross-section area of the pipe.

Learn more about economies of scale here :

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6 0
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