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Lelu [443]
3 years ago
15

Butler Corporation is considering the purchase of new equipment costing $84,000. The projected annual after-tax net income from

the equipment is $3,000, after deducting $28,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 9% return on its investments. The present value of an annuity of 1 for different periods follows:
Periods 9 | Percent
1 | 0.9174
2 | 1.7591
3 | 2.5313
4 | 3.2397

What is the net present value of the machine? (closest to)
Business
2 answers:
torisob [31]3 years ago
4 0

Answer:

The net present value of the machine is $5530

Explanation:

Data provided in the question:

Cost of the equipment = $84,000

Annual after-tax net income from the equipment after deducting depreciation = $3,000

Depreciation = $28,000

Useful life = 3 years

Required return on investment = 9% = 0.09

Now,

After-tax cash flow = After-tax net income + Depreciation

= $3,000 + $28,000

= $31,000

Therefore,

Net Present Value = Present value of cash flow - Investment

= ( $31,000 × PVIFA(11%, 3) ) - $84,000

= ( $31,000 × 2.5313 ) - $84,000

= $78470.3 - $84,000

= -$5529.7 ≈ - $5530

hence,

The net present value of the machine is $5530

yaroslaw [1]3 years ago
4 0

Answer:

- $5,529.70

Explanation:

The computation of the Net present value is shown below

= Present value of all yearly cash inflows after applying discount factor - initial investment

where,

The Initial investment is $84,000

And, the after tax net income would be

= Projected annual after-tax net income + depreciation expenses

= $3,000 + $28,000

= $31,000

Now the present value after applying the present value of an annuity for 3 years would be

= $31,000 ×  2.5313

= $78,470.3

Now put these values to the above formula  

So, the value would equal to

= $78,470.3 -  $84,000

= - $5,529.70

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Answer:

<em>Price per cookie $5.5</em>

Explanation:

The cost per cookies inclusive of wastage

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<em>Total cost  for  150 units</em>

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<em>Total sales value for 150 units</em>

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Selling price per unit

<em>=</em><em>$818.18/150 units</em>

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4 0
3 years ago
Fox Corp. failed to accrue warranty costs of $150,000 in its December 31, 20x2, financial statements. In addition, a $130,000 ch
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Answer:

$150,000

Explanation:

$150,000

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Manuel is retired and receives a fixed payment from his pension each month. when there is inflation?
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Manuel is retired and receives a fixed payment from his pension each there is inflation when the buying power of his pension will fall

This is further explained below.

<h3>What is inflation?</h3>

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To put inflation in its most basic form, it may be thought of as the general upward trend in the prices of goods and services over time. What this implies is that a dollar spent now won't purchase as much in the future. In other words, it will lower your ability to purchase things in the future.

In conclusion, Manuel is now retired and receives a certain amount from his pension on an annual basis. In the event that there is inflation, Manuel will be able to buy a lesser total amount with his pension money.

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8 0
1 year ago
A company has a process that results in 1,300 pounds of Product A that can be sold for $13.00 per pound. An alternative would be
n200080 [17]

Answer:

If the company process further the units, income will decrease by $600.

Explanation:

Giving the following information:

A company has a process that results in 1,300 pounds of Product A that can be sold for $13.00 per pound.

An alternative would be to process Product A further for $13,600 and then sell it for $23.00 per pound.

We need to determine the result of further processing the product.

Sell as-is:

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Continue processing:

Effect on income= 1,300*23 - 13,600= $16,300

It is more profitable to sell the units before further processing.

8 0
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