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Chapman Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $576,0

DIA [1.3K]

Answer:

The Firm should not Buy and Install the press as it delivers a negative NPV of -$24,924 at 11% discount rate over its 4 year operations

Explanation:

The General rule is to appraise the investment based on various appraisal techniques.

A technique that should be considered must have special focus on the time value of money, the required rate of returns expected by the firm and other Cashflow considerations.

The Net Present Value (NPV) approach will be the best method to proceed with.

The NPV approach typically falls under the following decision tree:

a. If NPV is negative (Reject the proposal)

b. If NPV is positive (Accept if it's a singular project, Accept the highest positive NPV if it's for mutually exclusive Projects)

c. If Zero (this is the breakeven line at which the Project covers all its cost but does not return a profit.) Also referred to as the IRR

Kindly refer to the attached for detailed workings

6 0

3 years ago

Whistleblowing is term being used for making a disclosure that is in the public interest. It will usually occur when an employee

noname [10]

The answer would be True if it’s a true or false question

6 0

3 years ago

The arrival of personal computer technology gave rise to client server networks that replaced traditional mainframe and minicomp

pishuonlain [190]

Answer:

The correct answer is letter "B": technological paradigm shift.

Explanation:

A paradigm shift takes place when the is a change in the methods and practices that were traditionally used and were conceived as main references due to the introduction of new ideas. Technological paradigm shifts are those caused by the creation of new technology that abruptly alters the market. For instance, the introduction of e-mails replaced faxes and courier services for mailing.

6 0

3 years ago

Effective December 15th, 2018, the operating leases will be recorded: A) as an asset and liability on the balance sheet of the l

Shalnov [3]

Answer: C) on the balance sheet of the lessee with value equal to the present value of future lease payments.

Explanation:

According to IFRS 16 and US GAAP ASC 842 which commenced Jan 1, 2019 and Dec 15, 2018 respectively, Lease payments are to be recognized on the balance sheet of the Lessee at the present value of the future payments on the lease.

The discount rate to be used will be implicitly stated in the lease agreement if both parties were able to determine it.

4 0

3 years ago

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports

blagie [28]

Answer:

The correct option is b. $8,100

Explanation:

Since the question was asked about the allocation of maintenance department expense to assembly and the maintenance department expense is based on the square footage.

So, the following equation should be used which is shown below:

= Maintenance department expense × assembly square foot space ÷ total sum of square foot space

where,

Maintenance department expense is $18,000

Assembly square footage is 2,700

And, the total sum of square foot space equals to

= Fabrication square foot space + assembly square foot space

= 3,300 + 2,700

= 6,000

Now, put these values on the above equation.

So, the value would be equals to

= $18,000 × 2,700 ÷ 6,000

= $18,000 × 0.45

= $8,100

The other cost is irrelevant. Thus, it is ignored while computation.

Hence, the amount of Maintenance department expense to be allocated to Assembly is $8,100

Therefore, the correct option is b. $8,100

7 0

3 years ago