The Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. First cost of equipment AOC per Year Salvage Value Pull System $-1450000 $-780000 $125000 Push System $-2550000 $-580000 $130000 Estimated Life 8 years 8 years Determine the salvage value for the push system that will make the company indifferent to the two systems. Also, MARR = 9.00% per year. The salvage value for the push system is determined to be $ in $1000 units.
Q: You are considering a stock investment in one of two firms (AllDebt, Incorporated, and AllEquity,…
A: Return on Asset = This ratio indicates that how a company manage its asset to generate revenue for…
Q: sh Gardens Co. bought a new truck for $58, 000. It paid $6, 380 of this amount as a down payment and…
A:
Q: Assuming markets are operating efficiently, use the current Information to answer the question.…
A: Below is an expression.Explanation:To calculate the realized return on your Treasury bond investment…
Q: Cullumber Inc. is planning to expand operations into South America in 8 years. The first three…
A: Here we have to use the future value of Annuity formula to calculate the amount at the end of 8…
Q: Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the…
A: Sales of Mini Mochi Munch (Year 1):=$8,900,000Sales Mini Mochi Munch (Year 2) = $6,900,000Other…
Q: Margo, a calendar year taxpayer, paid $1,580,000 for new machinery (seven-year recovery property)…
A: The Modified Accelerated Cost Recovery System (MACRS) is a methodology for tax depreciation in the…
Q: Collected these information from Bell Telecom Company (Egypt) producing 3 products "E" ,"F", and "G"…
A: The objective of the question is to prepare various budgets for Bell Telecom Company based on the…
Q: An investor is considering 4 investments, A, B, C, and D (leaving his money in the bank). The payoff…
A: To solve this decision problem, we'll first calculate the Expected Monetary Value (EMV) for each…
Q: An office building has three floors of rentable space with a single tenant on each floor. The first…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different…
A: The objective of the question is to calculate the new beta of the portfolio after selling a stock…
Q: project has annual cash inflows of $4,400, $3,900, $5,100, and $4,300, for the next four years,…
A: Discount rate = 14%Cash flow in year 1 = $4,400Cash flow in year 2 = $3,900Cash flow in year 1 =…
Q: annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years…
A: The time value of money states that because of its potential for growth, money has a higher value…
Q: You are debating whether or not to invest in your best friend's business idea, so use IRR to…
A: The answer is (d) 26.04%.Here's why:IRR (Internal Rate of Return) helps us determine the project's…
Q: Suppose 6%, 11%, and b₁ = 1.3. a. What is n, the required rate of return on Stock I? Round your…
A: The Capital Asset Pricing Model (CAPM) is a financial tool used to estimate the expected return on…
Q: "Financing capotal projects from loans over a long period of time forces the present and future…
A: The statement is referring to the concept of intergenerational equity in public finance.…
Q: Q1. A machine costs the company K98,000 and its effective life is estimated to be 12 years. If the…
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…
Q: Problem 1 Jim is planning to invest between $12,000 and $15,000 in two types of investment:…
A: Given:Amount to be invested is between $12000 to $15,000Yield of investment 1 is 6% and Yield of…
Q: Required: A bank sells a "three against six" $3,000,000 FRA for a three-month period beginning three…
A: To dertermine the value of the FRA and indentity who pays whom, we need to calculate the settlement…
Q: If you make an equal deposit at the end of every year to the account for the next 40 ears, what is…
A: Future value required=$8000000Period=n=40 yearsInterest rate=8%
Q: QUESTION 10 A project will produce operating cash flows of $57,000 a year for 3 years. During the…
A: Net present value refers to the capital budgeting technique used to evaluate the profitability and…
Q: K You are considering how to invest part of your retirement savings. You have decided to put…
A: The objective of the question is to calculate the new value of the portfolio, the return the…
Q: QUESTION 3 Project A B Year 0 Year 1 Year 2 Year 3 -$200 -$300 $100 $175 $100 $100 $125 $125 Based…
A: The regular payback period is one of the capital budgeting method that has been evaluated by simply…
Q: Andrew is an analyst at a wealth management firm. One of his clients holds a $7,500 portfolio that…
A: The investment allocation in the portfolio along with the contribution of risk from each stock is…
Q: Give correct typing answer with explanation
A: One share of this stock is worth approximately $28.04 when the required rate of return is 13%…
Q: PT Co has just paid a dividend of 15 cents per share and its share price one year ago was $3.00 per…
A: Shareholder return is the amount of profit a shareholder receives from holding a specific stock…
Q: You want to have $5 million when you retire in 30 years. You feel that you can save $750 per month…
A: The objective of this question is to find out the Annual Percentage Rate (APR) that needs to be…
Q: A mutual fund manager has a $20 million portfolio with a beta of 1.6. The risk-free rate is 5.5%,…
A: The CAPM model refers to the relationship between the systematic risk faced by the investment and…
Q: Jay purchased a Treasury bond with a coupon rate of 4.49% and face value of $100. The maturity date…
A: The objective of the question is to calculate the sale price of a Treasury bond that Jay plans to…
Q: Financial Math, question One: Ryan purchased an annuity that had an interest rate of 2.75%…
A: Present value refers to the current value of future investment or series of investments at a rate of…
Q: You are considering opening a copy service in the student union. You estimate your fixed cost at…
A: a) The break-even point in dollars for the copy service can be calculated by dividing the fixed…
Q: nded monthly and calls for equal monthly payments over the next 30 years. Her first ment will be due…
A: An amortization table is a tabular representation of the loan repayments to be made throughout the…
Q: Listen An example of the no-arbitrage principle holding would be when all risk-free investments…
A: In a scenario where the no-arbitrage principle holds, risk-free investments should offer investors…
Q: Explinnsion add please
A: The objective of the question is to calculate the firm's weighted average cost of capital (WACC)…
Q: Amarillo Bank Corp has a defined benefit plan with 60 employees. What is the minimum number of…
A: The employee benefit plan is the benefits plan given by the employer to the employee in which…
Q: Use the following information for Ingersoll, Incorporated. Assume the tax rate is 24 percent. 2020…
A: Balance Sheet (in thousands)Item 2020 2021Current Assets Cash 6,247 6,826Accounts receivable 8,160…
Q: ve been asked analyze echnology es with the following information on the companies: Primary shares…
A: Here's how to analyze the companies and determine the cheapest one based on the provided…
Q: Compute the monthly payments for a vehicle that costs $14 comma 10014,100 if you financed the…
A: Loan amortization is the process of paying off a debt over time through regular payments. With each…
Q: Alternative Financing Plans Desmond Co. is considering the following alternative financing plans:…
A: Earnings per share for a stock refers to the overall net income that is available for a stockholder…
Q: Question 2 ABC Inc. is expected to pay a dividend in Year 1 of $1.20, a dividend in Year 2 of $1.50,…
A: Dividend for Year 1 = d1 = $1.20Dividend for Year 2 = d2 = $1.50Dividend for Year 3 = d3 =…
Q: Today is 1/7/2021, John plans to deposit $500 at the beginning of each month into an investment…
A: The objective of the question is to calculate the balance amount in John's account on 31/12/2021.…
Q: Problem 6. Including loan The following investment alternatives are being evaluated. Assuming that…
A: The capital budegting tools are the tools which can be used for evaluating various alternative…
Q: Problem 24-12 (Algo) A global equity manager is assigned to select stocks from a universe of large…
A: Global equity manager measures the return on an investment in stock in comparison to a benchmark…
Q: U.S. Treasury STRIPS, close of business February 15, 2019: Maturity Price Maturity Price Feb 2020…
A: A STRIP, or Separate Trading of Registered Interest and Principal Securities, is a financial product…
Q: The current quoted price of a 13% coupon bond is $110. It pays coupon semi-annually. The next coupon…
A: The objective of the question is to calculate the quoted futures price of the contract. The futures…
Q: (Related to Checkpoint 6.3) (Determining the outstanding balance of a loan) Ten years ago you took…
A: Outstanding loan amount = Present value of future installment paymentsYou have taken loan of…
Q: A computer printer in a large administrative office has a printer buffer (memory to store printing…
A: 1. To find the probability that a computer user will be told to resubmit a print job at a later…
Q: This problem demonstrates the dependence of an annuity's present value on the size of the periodic…
A: Present value is what a sum of money in the future is worth in today’s dollars at a rate of…
Q: Today is 1/7/2021, John plans to deposit $500 at the beginning of each month into an investment…
A: The objective of the question is to calculate the balance amount in John's account on 31/12/2021.…
Q: What monthly compounded nominal rate would put you in the same financial position as 7.0% compounded…
A: Let the monthly compounded nominal rate of interest = iIt is given that the effective rate of the…
Q: For each of the following annuities, calculate the annual cash flow: Note: Do not round intermediate…
A: The Time Value of Money takes into account the opportunity cost of having money now versus in the…
Step by step
Solved in 3 steps with 2 images
- Required information The Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. Pull System Push System First cost of $-1,100,000 $-2,200,000 equipment $-640,000 $90,000 $-440,000 $60,000 8 years AOC per Year Salvage Value Estimated Life 8 years Determine the salvage value for the push system that will make the company indifferent to the two systems. Also, MARR = 10% per year. The salvage value for the push system is determined to be $ in $1000 units.Required Information The Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. First cost of equipment AOC per Year Salvage Value Estimated Life Pull System $-1,250,000 $-700,000 $105,000 8 years Push System $-2,350,000 $-500,000 $90,000 8 years Compare the annual worth of the two systems at MARR = 13% per year. Select the better system. The (Click to select) is determined to be the better system.The Fence Company is setting up a new production line to create top rails. The relevant data for two alternatives are shown below. Flow Line Manufacturing Cell Installed Cost Expected Life Salvage Value Variable Cost per Top Rail Click here to access the TVM Factor Table Calculator $15,000 5 years $0 $6.00 $10,000 5 years $0 $7.00
- A network company is planning to install a Fiber optic lines going to an island. What is the more economical on the two? Use EUAC when comparing. TROUGH LAND THROUGH WATER Initial cost per Km 235000 420500 Annual Maintenance per Km 12300 18000 Rate of Interest 10% 10% Length, Km 30 15 salvage Value per Km 23500 55500 Lifespan 20 20On September 30, 2024, Athens Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, 2025, and the program was available for release on April 30, 2025. Development costs were incurred as follows: September 30 through December 31, 2024 January 1 through February 28, 2025 March 1 through April 30, 2025 $ 2,220,000 820,000 420,000 Athens expects a useful life of four years for the software and total revenues of $6,000,000 during that time. During 2025, revenue of $1,200,000 was recognized. Required: Prepare a journal entry in each year to record development costs for 2024 and 2025.Your manager has asked you to advise your client Kofi Gyato, owner and director of Kofi Gyato Limited, on the implications of the proposed transaction.Your client has identified an opportunity to develop his business by manufacturing the products which he sells. To do this he would need to buy a machine which will have an expected life of ten years. He has received this quotation for the machine.GHȼPrice of machine70,000Delivery and installation3,500Commissioning costs1,500Annual maintenance costs3,500Required:Prepare a report to your client. Your report should:(a) Explain the difference between capital and revenue expenditure, and how each type of expenditure affects the accounts of a business.(b) Indicate which of the costs of the machine should be considered as capital cost and which should be considered as revenue cost.(c) Define depreciation and explain how the accounting entries for depreciation affect each element of the accounting equation.(d) Indicate:(i) What the annual…
- A Hilti PP11 pipe laser can be mounted inside or on top of a pipe, a tripod, or in a manhole to provide fast and accurate positioning and alignment of pipe sections. Jordon Construction is building a 23-mile pipeline through the desert to dispose of reverse osmosis concentrate by injection into a fractureddolomite formation. The PP11 laser can reduce construction costs through time savings by $9000 per month. What is the projected future worth of the savings over 2 years, if they start 1 month from now and the interest rate is 1% per month?On September 30, 2021, Athens Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, 2022, and the program was available for release on April 30, 2022. Development costs were incurred as follows: September 30 through December 31, 2021$2,400,000January 1 through February 28, 20221,000,000March 1 through April 30, 2022600,000 Athens expects a useful life of four years for the software and total revenues of $7,000,000 during that time. During 2022, revenue of $1,540,000 was recognized. Required: Prepare a journal entry in each year to record development costs for 2021 and 2022.Exploiting Internal Linkages Woodruff Company is currently producing a snowmobile that uses five specialized parts. Engineering has proposed replacing these specialized parts with commodity parts, which will cost less and can be purchased in larger order quantities. Current activity capacity and demand (with specialized parts required) and expected activity demand (with only commodity parts required) are provided. Activities Activity Driver ActivityCapacity Current ActivityDemand Expected ActivityDemand Material usage Number of parts 200,000 200,000 200,000 Installing parts Direct labor hours 20,000 20,000 16,000 Purchasing parts Number of orders 7,600 6,498 3,990 Additionally, the following activity cost data are provided: Material usage: $11 per specialized part used; $27 per commodity part; no fixed activity cost. Installing parts: $21 per direct labor hour; no fixed activity cost. Purchasing parts: Four salaried clerks, each earning a $47,000 annual salary; each clerk…
- Austins cell phone manufacturer wants to upgrade their product mix to encompass an exciting new feature on their cell phone. This would require a new high-tech machine. You are excited about his new project and are recommending the purchase to your board of directors. Here is the information you have compiled in order to complete this recommendation: According to the information, the project will last 10 years and require an initial investment of $800,000, depreciated with straight-line over the life of the project until the final value is zero. The firms tax rate is 30% and the required rate of return is 12%. You believe that the variable cost and sales volume may be as much as 10% higher or lower than the initial estimate. Your boss understands the risks but asks you to explain the alternatives in a brief memo to the board, Write a memo to the Board of Directors objectively weighing out the pros and cons of this project and make your recommendation(s).The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine which one has the best average rate of return. Machine A Machine B Machine C $83,087.40 $73,001.40 322,364.00 276,958.00 486,676.00 Estimated average income $45,130.96 Average investment Oa. Machine B Ob. Machine C Oc. Machine A Od. Machines B and C have the same preferred average rate of return.Tippy Toe Spa Company offers various services, such facials, laser hair removal and microdermabrasion. Currently, the company is considering purchasing the following spa equipment: Laser Hair Removal Machines Microdermabrasion Machines Facial Oxygen Units $64,500 $27,000 $126,400 $37,800 $91,400 $27,200 11% Cost per Machine Annual Cash Inflow Annual Cash Outflow Required Rate of Return Useful Life Residual Value 4 years $890 $29,700 $212,200 $197,900 14% 3 years $890 Laser Hair Removal Machine: Answer Years Microdermabrasion Machine: Answer Years Facial Oxygen Unit: Answer Years 7% Assume that each equipment's annual cash flow will occur for the period equal to its useful life. Do not enter dollar signs or commas in the input boxes. Use the present values tables in the textbook appendix. Use the negative sign for negative values. Round your answers to the nearest whole number. a) Determine the NPV of each piece of equipment. Laser Hair Removal Machine: $Answer Microdermabrasion…