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Leto [7]
2 years ago
12

Use Present Worth Analysis to determine whether Alternative A or B should be chosen. Items are identically replaced at the end o

f their useful lives. Assume an interest rate of 6% per year, compounded annually.
Alternative A Alternative B
Initial Cost 350 985
Annual Benefit 80 226
Salvage Value 160 186
Useful Life (yrs) 2 3
A. Alternative B, because it only incurs the initial cost once every three years instead of every two years
B. Alternative B, because it costs $250.00 more than Alternative A, in terms of present worth
C. Alternative A, because its present worth is positive
D. Alternative A, because it costs $250.00 less than Alternative B, in terms of present worth
Business
1 answer:
cestrela7 [59]2 years ago
7 0

Answer:

D. Alternative A, because it costs $250.00 less than Alternative B, in terms of present worth.

Explanation:

Net Present Worth of Alternative A:

-350 + 80 * (P/A, 6%, 6) - (350 - 160) * (P/F, 6%, 2) - (350 - 160) * (P/F, 6% , 4) + 160 * (P/F, 6% , 6)

= -350 + 80 * 5.41791 - (340 - 160) * 0.942596 - (350 - 160) * 0.888487 + 160 * 0.837484

NPW = $ -429.39

Net Present Worth of Alternative B:

-985 + 226 * (P/A, 6%, 6) - (985 - 226) * (P/F, 6%, 3) - (985 - 186) * (P/F, 6% , 4) + 186 * (P/F, 6% , 6)

= -985 + 226 * 5.41791 - (985 - 186) * 0.942596 - (985 - 186) * 0.888487 + 186 * 0.837484

NPW = $ -657.24

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What regulation was established in 1972 to ensure that businesses take responsibility for the products they produce?
Iteru [2.4K]

The Consumer Product Safety Commission was established to protect consumers from poor manufacturing and to make sure that products met quality and safety standards.

8 0
3 years ago
Last quarter, RP Enterprises earned $220,000 in sales revenue and had $90,000 cost of goods sold (at standard). RP also experien
Rudik [331]

Answer:

Gross profit= 131,500

Explanation:

Giving the following information:

Last quarter, RP Enterprises earned $220,000 in sales revenue and had $90,000 cost of goods sold (at standard). RP also experienced these variances: Materials price: $2,400 F Materials quantity: $1,400 U Labor price: $2,000 U Labor quantity: $1,000 F Overhead: $1,500 F

To calculate the cost of goods sold, we use actaul costs and quantity of direct labor and direct materials. Therefore, the only estimated cost is overhead.

Gross profit= 220,000 - 90,000 + 1,500= 131,500

4 0
3 years ago
On January 1, Greenview Company adopted the dollar-value LIFO method. The inventory cost on January 1 was $112,000. On December
Mumz [18]

Answer:

125,200

Explanation:

Adjust inventory to base year prices:

= Cost of ending inventory ÷ cost index for the year

= $136400 ÷ 1.1

= $124,000

Current year LIFO layer:

= Adjust inventory to base year prices - Cost of beginning inventory

= $124,000 - $112,000

= $12,000

Inventory to be shown:

= Add the new LIFO layer at end of period prices to prior year LIFO inventory

= (112,000 × 1) + (12,000 × 1.1)

= 112,000 + 13,200

= 125,200

7 0
3 years ago
Name the agency that is responsible for tracking changes in the composition of the u.s. labor force and forecasting employment t
nika2105 [10]
<span>The bureau of labor statistics, the principal fact-finding agency for the U.S. government, is the agency responsible for tracking changes in the composition of the U.S. labor force and forecasting employment trends. Collecting, analyzing, processing, and disseminating data to citizens, businesses and government agencies.</span>
5 0
3 years ago
Heath Food Corporation’s bonds have 7 years remaining to maturity. The bonds have a face value of $1,000 and a yield to maturity
joja [24]

Answer:

8.55%

Explanation:

For computing the current yield first we have to determine the present value by applying the present value formula which is shown below:

Given that,  

Future value = $1,000

Rate of interest = 8%

NPER = 7 years

PMT = $1,000 × 9% = $90

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

After solving this, the present value is $1,052.06

Now the current yield is

= PMT ÷ PV

= $90 ÷ $1,052.06

= 8.55%

3 0
3 years ago
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