Two alternative means of providing engineering drafting services are under consideration.Handy-Cam$250,000$115/hr$250/hr$15,000R-tistry$200,000$120/hr$250/hr$20,000Purchase PriceOperating CostRevenueMarket value (end of useful life)Useful lifeб yearsб yearsIt is anticipated that the chosen alternative will be used to generate revenue 8 hrs/day, 250 days per year. The company uses a MARR = 12% for allinvestments. At what usage of the drafting services (hours/year) would you be indifferent between the two alternatives? Remember to show your calculations in yoursupporting work.Round your answer to the neares whole hour.

Time Value of Money: It is the concept that amount of money received in the future is worth less…

Answered: At what usage of the drafting services…

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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As the controller of Chardon Consulting, you have hired a new employee, whom you must train. She objects to making an adjusting entry for accrued salaries at the end of the period. She reasons, "We will pay the salaries soon. Why not wait until payment to record the expense? In the end, the result will be the same." Write a reply to explain to the employee why the adjusting entry is needed for accrued salary expense. At the end of the period we must make an adjusting entry for accrued salary expense to (balance the adjusted trial balance, make sure we don't spend the cash owed to employees, reconcile the cash account, report all our, salary expense of the period). The unpaid salary expense is our (assent owed from employees, expenses in the future, liability to employees).If we fail to make this adjustment, we (overstate both expenses and liabilities, overstate expenses, overstate liabilities, understate both expenses and liabilities, understate expenses, understate…
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According to your studying of the Conceptual Framework, Discuss the following: 1. Selane Eatery operates a catering service specializing in business luncheons for large companies. Selane requires customers to place their orders 2 weeks in advance of the scheduled events. Selane bills its customers on the tenth day of the month following the date of service and requires that payment be made within 30 days of the billing date. Conceptually, when should Selane recognize revenue related to its catering service? 2. Mogilny Company paid $135,000 for a machine. The Accumulated Depreciation account has a balance of $46,500 at the present time. The company could sell the machine today for $150,000. The company president believes that the company has a “right to this gain.” What does the president mean by this statement? Do you agree? 3. Three expense recognition methods (associating cause and effect, systematic and rational allocation, and immediate recognition) were discussed in the chapter…
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At what usage of the drafting services (hours/year) would you be indifferent between the two alternatives? Remember to show your calculations in your supporting work. Round your answer to the neares whole hour.