A company is planned to install new automated plastic molding press. Four different pressesare available as follows:Press 1 Press 2 Press 3 Press 4Capital Investment $24,000 $30,000 $49,000 $52,000Useful Life (year)5555Annual ExpensesPower ($)Labor ($)Maintenance ($)Tax & Insurance ($)2,72026,4001,6004802,72024,0001,8006084,80016,8002,6009924,80014,8002,0001,040Assume that each press has the same output capacity (120,000 units per year) and all units canbe sold (the selling price is $0.375 per unit. Additional capital invested is expected to earn atleast 10%. Which press should be chosen?

The phenomenon of capital budgeting is used to determine the profitability of a project and helps to…

Answered: A company is planned to install new…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Oriole provides enivronmentally friendll laswn services for homeownders. Its operating costs are as follows: depreciation (straight-line) $1500 per month advertising $400 per month insurance $3560 per month weed and feed materials $24 per lawn dircet labor $3 per lawn fuel $1 per lawn Oriole charges $80 per treatment for the average single family lawn. For the month ended July 31, 2022, the company had total sales of $9600. Prepare a CVP Income statement for the month ended July 31,2022.
heavy equipment for a certain project and the details are as follows: ITEM: MACHINE A: MACHINE B: First Cost P2,000,000.00 P3,000,000.00 Annual operating P325,000.00 P250,000.00 cost Annual labor cost Insurance and taxes Payroll taxes Estimated life P500,000.00 P320,000.00 4% 10% 12 yrs. 4% 10% 12 yrs. If the minimum ROR is 25%, What is the annual cost of Machine A & B using present worth method?
Company Alpha has been constructing a new piece of plant over the past 18 months which is due to come into use on 1 August 2015. The following information is available. $ List price of materials 10,000,000 Trade discount given on materials 5% Delivery costs 500,000 Installation costs 2,000,000 Staff training 25,000 Pre production testing 100,000 A loan was taken out to finance the plant and the interest accrued on this loan is $50,000. Management invested the loan proceeds in a deposit account before it was needed which generated interest of $10,000. The asset has a useful life of 5 years and has no residual value. Show the extracts from the statement of comprehensive income for the year ended 31 December 2015 and the statement of financial position at that date. For any items not included in calculating the cost rice of the asset an explanation should be given.
given the two machine's data
Q # 1: On 1-March-2010, Alpha Pharmaceuticals Ltd. purchased 10 machines for manufacturingtablets. The price of each machine is $150,000. The transportation and installation cost is 1% and 2.5% of the price respectively for each machine. The company also had to bear the cost of test runs for each machine, which were $1,500. The approximate repair and maintenance expense for each machine is $4,000 per year. The company paid 25% of price in cash and signed a 6 month, Notes Payable (N/P) for the remaining balance. The N/P bears interest expense for the company at 5% per annum. Each machine is useful for 5 years and experts estimate that each machine can be sold at the end of its useful life for 10% of its purchase price. During its useful life, the machine will produce 7,500,000 tablets. Following table shows number of tablets produced in each year. Please note that the company’s fiscal year ends on 30th June. Year Units Produced1 2,500,000 2 1,700,000 3 1,400,000 4 1,200,000 5 700,000…
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $228,000 including installation. The company estimates that the equipment will have a residual value of $24,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours, actual use per year as follows: 1 year 3,000 hours; 2 years 1,700 hours; 3 years, 1,800 hours, 4 years 2,200 hours 5 years 2,000 hours 6 years 1,300 hours. Prepare depreciation schedule for 6 years using the activity based method
A local manufacturing company estimated the following expenses for the upcoming year: a. Insurance on factory: $100,000 b. Factory security: 1 guard at $20/hour for a 2,000 hour work year . 1 production supervisor at $90,000/year d. Repair/Maintenance Technicians: 2 technicians at $40/hour each for a 2,000 hour work year e. Depreciation: $25/machine hour f. Utilities: $7/machine hour The company applies overhead on the basis of machine hours. Required: Build the cost formula Assume one unit of output takes 2 machine hours, and the estimated production for the year is 20,000 units • Calculate the expected number of machine hours to be used in the year. o Calculate the estimated total manufacturing overhead cost. o Calculate the applied overhead rate per machine hour. o Calculate the applied overhead per unit of output.
1. The Luna Corporation is trying to decide if they should purchase a Truck for hauling material which costs $625,400. The Truck will require $30,600 of working capital and major maintenance in years 3, year 5, and year 7. The major maintenance will cost $50,000 in years 3 and 5 and $65,000 in years 7. The truck will increase the net income by $185,750 in years 1 through 4, and $91,250 in years 5 through 7. At the end of year 7, the company expects to sell the truck for 5% of the cost that they paid for it. Calculate the net present value of the Truck using a 10% rate of return. Show your work and indicate if the Luna Corporation should purchase the Truck. PLEASE PUT IN SIMPLEST FORM
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