Consider a piece of equipment for which the expenditure at the beginning of period 1 is $40,000. Given that this is a cost, consider it as a negative in a net revenue framework. The net revenue at the end of year 1 is $15,000. The net revenue at the end of year 2 is $20,000. The net revenue at the end of year 3 is $21,000. The net revenue at the end of year 4 is $25,000. This includes revenue from operations and sale of the used equipment. The interest rate is 6%. What is the net present value of this net revenue stream?
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Consider a piece of equipment for which the expenditure at the beginning of period 1 is $40,000. Given that this is a cost, consider it as a negative in a net revenue framework. The net revenue at the end of year 1 is $15,000. The net revenue at the end of year 2 is $20,000. The net revenue at the end of year 3 is $21,000. The net revenue at the end of year 4 is $25,000. This includes revenue from operations and sale of the used equipment. The interest rate is 6%. What is the
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- Hamilton Company applies manufacturing overhead costs to products based on direct labor hours. The company estimates manufacturing overhead cost for the year to be $268,000 and direct labor hours to be 20,000. Actual overhead for the year was $305,000. 1. Compute the predetermined overhead rate. 2. If the company actually used 23,800 direct labor hours, how much manufacturing overhead is applied to the company's jobs?Thelma has a long term lease on her cotton farm with an annual lease payment of $10,000. Prior to planting in the spring of 2020, she predicts that she will have $5000 left after paying all of her costs except for the annual lease payment. In this case, what should Thelma do?Select one:a. continue to operate because total revenue exceeds total costb. shut down and experience an accounting loss of $5000c. continue to operate even though she predicts an accounting loss of $5000d. exit the market and experience an accounting loss of $10,000River Girl Fly Fishing Shop applies overhead at a rate of $5 per direct labor hour. At the end of the month, the company had accumulated 7000 direct labor hours and incurred $38000 in manufacturing overhead. Manufacturing overhead was $600 underapplied. $3000 underapplied. $600 overapplied. $3000 overapplied.
- Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. The following data were collected from last year’s operations (revenues and costs in thousands of dollars). Store Revenues Costs 101 $4,120 $4,244 102 2,247 2,934 103 5,768 5,211 104 4,022 4,048 105 2,944 3,736 106 4,063 3,389 107 6,914 5,059 108 1,809 2,474 109 5,516 4,768 110…A business owner makes 1,000 items a day. Each day she contributes eight hours to produce those items. If hired elsewhere, she could have earned $250 an hour. The item sells for $15 each. Production does not stop during the weekends. If the explicit costs total $150,000 for 30 days, the firm’s accounting profit for the month equals: $300,000 $60,000 $450,000 $240,000 Refer to the situation in part (1). Assume the owner’s only opportunity cost is her foregone salary. If she works 56 hours a week (8 hours a day for 7 days), is the firm making an economic profit? Yes No If the firm is earning negative economic profits, it implies That the accounting profits are zero That the accounting profits are negative That the accounting profits are positive That more information is needed to determine accounting profits. The fixed-cost fallacy occurs when A firm considers irrelevant costs A firm ignores relevant costs A firm considers overhead or depreciation costs to make short-run decisions Both a…Loessing Compan produced and sold 12,000 units last year with sales price of $45 per unit and unit variable cost of $20. Fixed costs totaled $250,000. In the coming year, Loessing expects price to decrease by ten percent. Neither unit variable cost nor fixed costs can be changed. If Loessing wants to maintain the same level of income, what will the new level of production need to be? Activate Windows Go to Settings to activate Window
- A brewery produces regular beer and a lower-carbohydrate "light" beer. Steady customers of the brewery buy 10 units of regular beer and 17 units of light beer monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $29,000 and the cost per unit of light beer is $35,000. Every unit of regular beer brings in $100,000 in revenue, while every unit of light beer brings in $400,000 in revenue. The brewery needs at least $12,000,000 in revenue, and has determined that the total demand will be at least 45 units of beer. Complete parts (a) and (b). (a) How much of each type of beer should be made so as to minimize total production costs? 20 units of regular beer and 25 units of light beer should be made, for a minimum total cost of $ 1455000 (Type integers or decimals.) (b) Suppose the minimum revenue is increased to $12,600,000. Use shadow costs to calculate the total…The price of bauxiteincreased to its highest level due to conditions which impacted supply. Historically, bauxite has traded at between 1500 and 1600 USD per tonne. But the price increased to over 1900USD in November 2020. Growing demand in Canada for bauxite to be turned into aluminium, coupled with a sharp fall in Jamaican production have both been factors in the price increase. Bauxite production in Jamaica for 2017-18 fell 65% year-on-year due to flood conditions causing damages as well as increased competition. The London Metal Exchange predicts that global consumption of bauxite is likely to be greater than production by 20 million tonnes next year. In the US, companies in the steel and petrol industry have put pressure on the US government to relax import controls, warning that otherwise they might run out of bauxite. Commentators predict that most steel and petrol producers will be unaffected because bauxite is such a small part of their spending. a. Explain, using supply and…A small company produces organic cookies. When the price is $9.00 per dozen, the average daily sales has been 84 dozen cookies. When the price was decreased to $6.00 per dozen, the average daily sales increased to 110 dozen cookies. Assume that daily cookie sales is linearly related to price per dozen. Each dozen cookies has a variable cost of 70 cents to make, plus additional daily fixed costs of $55.00
- The price of bauxite increased to its highest level due to conditions which impacted supply. Historically, bauxite has traded at between 1500 and 1600 USD per tonne. But the price increased to over 1900 USD in November 2020. Growing demand in Canada for bauxite to be turned into aluminium, coupled with a sharp fall in Jamaican production have both been factors in the price increase. Bauxite production in Jamaica for 2017-18 fell 65% year-on-year due to flood conditions causing damages as well as increased competition. The London Metal Exchange predicts that global consumption of bauxite is likely to be greater than production by 20 million tonnes next year. In the US, companies in the steel and petrol industry have put pressure on the US government to relax import controls, warning that otherwise they might run out of bauxite. Commentators predict that most steel and petrol producers will be unaffected because bauxite is such a small part of their spending. Graph the predictions of the…The price of bauxite increased to its highest level due to conditions which impacted supply. Historically, bauxite has traded at between 1500 and 1600 USD per tonne. But the price increased to over 1900 USD in November 2020. Growing demand in Canada for bauxite to be turned into aluminium, coupled with a sharp fall in Jamaican production have both been factors in the price increase. Bauxite production in Jamaica for 2017-18 fell 65% year-on-year due to flood conditions causing damages as well as increased competition. The London Metal Exchange predicts that global consumption of bauxite is likely to be greater than production by 20 million tonnes next year. In the US, companies in the steel and petrol industry have put pressure on the US government to relax import controls, warning that otherwise they might run out of bauxite. Commentators predict that most steel and petrol producers will be unaffected because bauxite is such a small part of their spending. C. Illustrate the…The price of bauxite increased to its highest level due to conditions which impacted supply. Historically, bauxite has traded at between 1500 and 1600 USD per tonne. But the price increased to over 1900 USD in November 2020. Growing demand in Canada for bauxite to be turned into aluminium, coupled with a sharp fall in Jamaican production have both been factors in the price increase. Bauxite production in Jamaica for 2017-18 fell 65% year-on-year due to flood conditions causing damages as well as increased competition. The London Metal Exchange predicts that global consumption of bauxite is likely to be greater than production by 20 million tonnes next year. In the US, companies in the steel and petrol industry have put pressure on the US government to relax import controls, warning that otherwise they might run out of bauxite. Commentators predict that most steel and petrol producers will be unaffected because bauxite is such a small part of their spending. A. Explain, using supply…