1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
madam [21]
2 years ago
5

The Nash Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in t

he Sunbelt. In order to do so, Nash has decided to locate a new factory in the Panama City area. Nash will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs.
Building A: Purchase for a cash price of $611,000, useful life 25 years.
Building B: Lease for 25 years with annual lease payments of $71,370 being made at the beginning of the year.
Building C: Purchase for $657,400 cash. This building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of $6,800. Rental payments will be received at the end of each year. The Nash Inc. has no aversion to being a landlord.
In which building would you recommend that The Nash Inc. locate, assuming a 12% cost of funds?
Business
1 answer:
polet [3.4K]2 years ago
4 0

Answer:

BUILDING C

Explanation:

Calculation to determine In which building would you recommend that The Nash Inc. locate, assuming a 12% cost of funds

BUILDING A $611,000

Calculation for BUILDING B

Annual payments $71,370

X PV factor 8.65246=1+(1-(1.11)^-24)/0.12

Net present value $617,526.1

Calculation for BUILDING C

Annual rental $6,800

X PV factor 7.71993 =(1-(1.11)^-25)/0.12

Present value 52,495.5

Net present value =$657,400- $52,495.5

Net present value =$604,905

Net present value

Building A $611,000

Building B $617,526.1

Building C $604,905

Based on the above calculation Nash inc should locate itself in Building C because it has less Net present value

Therefore the building you would recommend that The Nash Inc. locate, assuming a 12% cost of funds is BUILDING C

You might be interested in
The crowding-out effect refers to the possibility that:
Natalka [10]

Answer:

a. a deficit, financed by borrowing in the capital markets, will increase the interest rate and reduce investment in the private sector.

Explanation:

Crowding out effect is when government borrowing from the capital markets leads to an increase in interest rate. this makes it more expensive for private sector to borrow and this reduces investment by private sector

6 0
3 years ago
Which of the following is a potential safety hazard?
butalik [34]
Please provide a proper information to answer this question
4 0
3 years ago
Read 2 more answers
Wood Dreams makes hand crafted furniture in its retail stores. The furniture maker has recently installed a new assembly process
Sophie [7]

Answer: 204.76%

Explanation:

In the earlier scenario, furniture maker manufactured 47 (42 non defective) pieces per 5 laborers working 8 hours day.

Thus, the productivity in terms of units per labor hour is as follows:

= \frac{42}{8\times5}

= 1.05

Similarly, after the process improvement, the productivity in units per labor hour would be:

= \frac{128}{8\times5}

= 3.2

Thus change in productivity would be calculated as:

=\frac{3.2-1.05}{1.05}\times100

= 2.047 × 100

= 204.76%

Thus, the productivity of non defective parts would increase by 204.76%.

4 0
3 years ago
If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 400 units, and the beginning
Ksivusya [100]

Answer:

7,000 units

Explanation:

Calculation for the number of units set forth in the production budget, representing total production for the current period

Using this formula

Number of units =Current period +Ending inventory - Beginning inventory

Where,

Current period =7,000 units

Ending inventory=400 units

Beginning inventory =400 units

Let make plug in the formula above

Number of units =7,000 units + 400 units-400 units

Number of units =7,000 units

Therefore the Number of units will be 7,000 units

5 0
3 years ago
The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit: Production
Blizzard [7]

Answer:

$3,500

Explanation:

Under variable costing method, product costs are calculated on variable manufacturing  costs only.

Step 1 : Determine unit Product Cost

Product Cost = Variable Manufacturing Costs

                      =  $ 35

Step 2 : Determine the units in Inventory

Units in Inventory = Opening Stock + Production - Sales

                              = 0 +  7,210 - 7,110

                              = 100 units

Step 3 : Determine Inventory value

Inventory value = Units x Cost per unit

                           = 100 units x $ 35

                           = $3,500

Conclusion :

the ending inventory of finished goods under variable costing would be: $3,500

3 0
2 years ago
Other questions:
  • The strategic alliance between Coca-Cola and Nestlé has spanned a period of over 20 years due to the fact that both companies be
    10·1 answer
  • Quantitative Problem: You need $11,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortiz
    12·1 answer
  • List and explain the four factors of production ,stating their reward.​
    9·1 answer
  • S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2021, S&L purchased C
    6·1 answer
  • There are two employers in Bucolic that hire people who do not have a high school degree: a grocery store and a hardware store.
    15·1 answer
  • XYZ Corporation has declared a rights offering to stockholders of record on Wednesday, November 15th. Under the offer, sharehold
    7·1 answer
  • 6. If consumers always spend 30 per cent of their income on food, then the income elasticity of demand for food is
    5·1 answer
  • Wang, Inc. borrowed $10,000 from Second National Bank on January 1, 2010. The loan is to be repaid on July 1, 2010, along with i
    7·1 answer
  • What is judiciary and executive?<br>​
    14·1 answer
  • Two firms, Boomburgs and ABC X-Plode, both sell the same fireworks bundle. If they sell their fireworks at the manufacturer's su
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!