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azamat
3 years ago
13

One year​ ago, your company purchased a machine used in manufacturing for . You have learned that a new machine is available tha

t offers many​ advantages; you can purchase it for today. It will be depreciated on a​ straight-line basis over ten​ years, after which it has no salvage value. You expect that the new machine will contribute EBITDA​ (earnings before​ interest, taxes,​ depreciation, and​ amortization) of per year for the next ten years. The current machine is expected to produce EBITDA of per year. The current machine is being depreciated on a​ straight-line basis over a useful life of 11​ years, after which it will have no salvage​ value, so depreciation expense for the current machine is per year. All other expenses of the two machines are identical. The market value today of the current machine is . Your​ company's tax rate is ​, and the opportunity cost of capital for this type of equipment is . Is it profitable to replace the​ year-old machine?
Business
1 answer:
Kazeer [188]3 years ago
6 0

Answer:

Yes it would be profitable to replace a year old machine.

Explanation:

its always best to buy new things to replace others.

old things usually dont work correctly and could be out of date.

buying something new can reduce that probability of not working correctly

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The two categories of cost comprising conversion costs are
bekas [8.4K]

Answer:

Explanation:

Direct labor and factory overhead

3 0
2 years ago
revorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets a
nlexa [21]

Answer:

$9,906 F

Explanation:

Calculation as follows:

Budget Income Statement

<u>Particular</u>                                                       $

Revenue (28.4 x 7,000)                          198,800

Direct Labor (2.8 x 7,000)                       (19,600)

Direct Material (10.7 x 7,000)                  (74,900)

Manufacturing Overheads

(38,000 + [1.5 x 7,000] )                           (48,500)

Selling and administrative Expenses

(23,600 + [0.3 x 7,000] )                           (25,700)

Net Operating Income                               30,100

Actual Income Statement

<u>Particular</u>                                                       $

Revenue                                                   205,320

Direct Labor                                             (18,974)

Direct Material                                         (72,252)

Manufacturing Overheads                      (48,320)

Selling and administrative Expenses      (25,768)

Net Operating Income                             40,006

Activity variance for net operating income = Net operating income actual - Net operating income budgeted

Activity variance for net operating income = 40,006 - 30,100

 Activity variance for net operating income = $9,906 F

8 0
3 years ago
You plan to retire in 30 years and you are investing $250 per month in the BMO Large-Cap Growth mutual fund. The fund has an ave
mr Goodwill [35]

Accumulated Balance is given by :

A=P\dfrac{(1+i)^n-1}{i}\times (1+i)

Here,

n = time period = 30×12 = 360.

i=\dfrac{13.45}{100}\times \dfrac{1}{12}=0.0112

P = principal price = $250.

Putting all given values in above equation, we get :

A=250\times \dfrac{(1+0.0112)^{360}-1}{0.0112}\times (1+0.0112)\\\\A=\$1221659.48

Hence, this is the required solution.

6 0
3 years ago
The owner of a successful restaurant has gotten bored with his business. He
marta [7]

Answer:

my best guess would be C.

5 0
3 years ago
Read 2 more answers
You have just purchased a share of stock for $ 19.09. The company is expected to pay a dividend of $ 0.51 per share in exactly o
frozen [14]

Answer:

$20.64

Explanation:

Use the rate of return formula to solve for the new price;

r = ( P1 +Div1 -P0)/P0

whereby;

r = rate of return = 10.8% or 0.108 as a decimal

Div1 = Next year's dividend amount = $0.51

P1 = next year's stock price =?

P0 = Current stock price = $19.09

Next, plug in the numbers to the formula;

0.108 = (P1 + 0.51 - 19.09) / 19.09

Multiply both sides by 19.09;

2.0617 = P1 -18.58

Add 18.58 on both sides;

2.0617 + 18.58 = P1

20.64 = P1

Therefore, you need to sell the share at $20.64

8 0
3 years ago
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