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Bas_tet [7]
3 years ago
7

A company invests $40,000 in a project with the following net cash flows: Year 1: $3,000 Year 2: $8,000 Year 3: $14,000 Year 4:

$19,000 Year 5: $22,000 Year 6: $28,000 In what year does payback occur
Business
1 answer:
hram777 [196]3 years ago
8 0

Answer:

the payback period is 3.34 years

Explanation:

The computation of the payback period is as follow;

Given that

Year       Cash flows         Cumulative cash flows

0             -$40,000           $-40,000

1               $3,000              $3,000

2              $8,000              $11,000

3              $14,000             $25,000

4              $19,000             $44,000

5              $22,000            $66,000

6               $28,000           $94,000

Now the payback period is

= 3 years +  ($40,000 - $25,000) ÷ $44,000

= 3 years + 0.34

= 3.34 years

Hence, the payback period is 3.34 years

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Comfy Mattresses, Inc., is opening a new plant in Orlando, Florida. Ron Lane, distribution manager, has been asked to find the l
romanna [79]

Answer:

The question content is not complet. Here is the complete question I got from google

Comfy Mattresses, Inc., is opening a new plant in Orlando, Florida. Ron Lane, distribution manager, has been asked to find the lowest cost outbound logistics system. Given an annual sales volume of 24,000 mattresses, determine the costs associated with each option below.

a. Build a private warehouse near the plant for $300,000. The variable cost, including warehouse maintenance and labor, is estimated at $5 per unit. Contract carrier transportation costs $12.50 per unit on average. No external transportation services are necessary for shipment of mattresses from the plant to the warehouse in this scenario. The fixed warehouse investment can be depreciated evenly over 10 years.

b. Rent space in a public warehouse 10 miles from the plant. The public warehouse requires no fixed investment but has variable costs of $8 per unit. Outbound contract carrier transportation would cost $12.50 per unit on average. The carrier at charges $5 per unit to deliver the mattresses to the warehouse from the plant.

c. Contract the warehousing and transportation services to the Freeflow Logistic Company, an integrated logistics firm with a warehouse location 25 miles from the plan. Freeflow requires a fixed investment of $150,000 and charges $20 per unit for all services originating at the plant. The fixed investment covers a 10-year agreement with Freeflow.

d. Name a few advantages aside from cost that the low-cost alternative above may have over the other alternatives.

Explanation:

Let us weigh different options for Comfy Mattresses:

Option A

building cost for a private warehouse near the plant(one time fixed cost)  = $300,000

maintenance warehouse of  $ 5 per unit= (24000 X5) = $120,000

cost of contract carrier $12.50 per unit = (24000X12.50) = $300,000

Total cost = $420,000 $(120000+300000)

Depreciation @ 10% = $30,000

Total cost in a year = $450,000 (Total cost + Depreciation = $(420000 +30000))

Option 2

Variable cost=  (24000 X8) $192000

Transportation of outbound carrier = (24000X12.50) $300,000

Carrier charges from warehouse to plant= (24000 X5) $120,000

Total = $612,000 (192000+300000+120000)

Option 3

Company's freeflow Logistic - Fixed investment = $150,000

Other charges =  (24000 X20) = $480,000

Total = $630,000 = $(150000 + 480000)

The best option is the first option. The investment in the first  is more, but after deducting a depreciation of 10% every year the cost would be much less. The total cost in the first year  would be $750,000 if we take depreciation which is more than the 2nd and 3rd option.

The cost will be drastically reduced for the second year. It will  be $450,000, which covers the extra investment done in the warehouse during the first year. From the third year onward, the benefit of going with the first option will start showing.

If we are to  rate all the options, Option 3 would be second in order, after the first option. Here Comfy Mattresses Inc outsources all the services to a private vendor  by paying little extra amount than Option 2. Ina way all the risk as well as tension of transportation and running the plant is passed on the the vendor (Freeflow Logistic Company).

8 0
3 years ago
Many of​ smashburger's competitors combine a​ burger, fries, and a drink offered at a reduced​ "combo" price. this practice is k
kaheart [24]
<span>Many of​ smashburger's competitors combine a​ burger, fries, and a drink offered at a reduced​ "combo" price. This practice is known as​ product bundle pricing.

Product bundle pricing is when a store will combine items together and do a value price on them as a bundle. Each item has a price they can pay to purchase an item separately but there is a special price and it's usually a better deal when you purchase it in a bundle. 
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7 0
3 years ago
When a business asks "What business are we in?" they are: a. conducting an environmental analysis. b. defining their business mi
Paul [167]

Answer:

B. Defining their business mission.

8 0
3 years ago
As it applies to corporations, employee-owner separation means that many employees
Kruka [31]

As it applies to corporations, employee-owner separation means that many employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement and they as employee are not stockholders of the company for which they work.

For better understanding, lets explain ownership and control in firms

  • Separation of Ownership and Control in firm is done by Shareholders. They hire managers to manage the firm on their behalf. Employee only work for shareholders. Employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement

From the above, we can therefore say that the answer that as it applies to corporations, employee-owner separation means that many employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement and they as employee are not stockholders of the company for which they work is true

Learn more about separation from

brainly.com/question/23883384

4 0
2 years ago
International data show a positive correlation between income per person and the health of the population.
Y_Kistochka [10]

Answer:

True

Explanation:

In the case when the person income is high so he have an opportunity to have a good food, healthy environment, health care, etc this represents that the higher income defines the good health and if a person is healthy so he would work in efficient way as compared with the sick person

Therefore the given statement is true

3 0
3 years ago
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