Answered: two possible products from Islamic…

Business

Finance

two possible products from Islamic finance to the company.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 5TP: You own a construction company and have recently received a contract with the local school district...

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Adidas is evaluating a proposal for a new product. If they launch the product, they will use an existing facility in the production process, which they previously acquired for $4 million. They currently lease it to a third party, and they expect to continue to do so if they don't use it for the new product. They rent it out for $102,000 and they expect that to remain flat for the foreseeable future. The project requires immediate investment in CAPX of $1.3 million, which will be depreciated on a straight-line basis over the next 10 years for tax purposes. The project will end after eight years, at which time they expect to salvage some of the initital CAPX and sell it for $469,000. The project requires immediate working capital investments equal to 10% of predicted first-year sales. After that, working capital will remain at 10% of the following year's expected sales. They expect sales to be $4.6 million in the first year and to stay constant for eight years. Total…
A lodging property wishes to change its lighting system with the most efficient ones. The old system will be sold in the market and the new system will cost $500,000. The new investment does not require an additional outlay but it needs incremental working capital of $48,000. The old lighting system can be sold for $200,000 in the market which is an equivalent of its books value. Moreover, the new investment will not have incremental sales revenue but it will have incremental operating costs of $22,000, and incremental depreciation of $11,000 for the first year. There is no expected change in net working capital after the project is undertaken and no estimated salvage value for the first year. For the second year, suppose that there is 12.00% increase in operating costs and depreciation. At the end of the second year, the estimated salvage value is $10,000 on the new lighting system. What are the net investment and net cash flow for the first and second year for this investment (assume…
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Water supply for an irrigation system can be obtained from a stream in some nearby mountains. Two alternatives are being considered, both of which have essentially infinite lives, provided proper maintenance is performed. The first is a concrete reservioir with a steel pipe system and the second is an earthen dam with a wooden aqueduct. Below are the costs associated with each. Compare the present worths of the two alternatives, using an interest rate of 8%. Which alternative should be chosen {Perform all calculations using 5 significant figures and round any monetary answers to the nearest dollar}? Concrete Reservoir 550,000 2,250 N/A First Cost [dollars] Annual Maintenance Costs [dollars] Replacing the wood portion of the aqueduct each 15 years The cost Concrete Reservoir is (in PW dollars): Earthen Dam 230,000 15,000 120,000 Number The cost of the Earthen Dam plus Aqueduct is (in PW dollars): Number Which alternative should be chosen (enter either 'Reservoir' or 'Dam'?