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Digiron [165]
3 years ago
6

Otool Inc. is considering using stocks of an old raw material in a special project. The special project would require all 150 ki

lograms of the raw material that are in stock and that originally cost the company $2,236 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $8 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $7.10 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $86 for all 150 kilograms. What is the relevant cost of the 150 kilograms of the raw material when deciding whether to proceed with the special project?
Business
1 answer:
frez [133]3 years ago
5 0

Answer:

The relevant cost of the 150 kilograms of the raw material when deciding whether to proceed with the special project: $979.

Explanation:

We do not use the original cost $2,236 because it is sunk cost.

We do not use market value because Otool Inc. does not either incur this cost nor sacrifice any benefit from not buying at market price.

The relevant cost of these raw material should be the benefit sacrificing from not selling the raw material, instead using it in the project; calculated as:

Selling price x Amount sold - Cost of delivery = 7.1 x 150 - 86 = $979.

Thus, the answer is $979.

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Answer:

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So monetary base will increase by $3 billion.

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3 years ago
Correl Corporation has provided the following data concerning an investment project that it is considering: Initial investment $
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Answer:

 A. $38,500 

Explanation:

The net present value is the present value of after tax cash flows from an investment less the amount invested.

Npv can be calculated using a financial calculator.

Cash flow in year 0 = $-190,000

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NPV = $38,417.21

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

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3. Press compute

I hope my answer helps you

6 0
3 years ago
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4 0
3 years ago
Carby Hardware has an outstanding issue of perpetual preferred stock with an annual dividend of $7.50 per share. If the required
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Answer:

The answer is $115.38

Explanation:

Solution

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3 years ago
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