Answer:
A. $8,187.17
B. $597.38
C. 30%
Explanation:
Calculate the Net Present Value of the Project at the Required Return of 9%
The following is the calculation of NPV using a financial calculator :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
9.00 % i/yr
Shift NPV $8.187.1666 or $8,187.17
Calculate the Net Present Value of the Project at the Required Return of 9%
The following is the calculation of NPV using a financial calculator :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
28.00 % i/yr
Shift NPV $597.3765 or $597.38
You will be indifferent between accepting the project and rejecting it at the internal rate of return. The Internal Rate of Return is the interest rate that makes the Present Vale of Cash Flows to equal the Initial Cost of the Investment.
Use the Data given to find the Internal Rate of Return :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
Shift IRR 30%
Answer: a. Capital expenditure
b. Revenue expenditure
c. Revenue expenditure
d. Capital expenditure
Explanation:
Capital expenditures are usually huge expenditure on fixed assets such as land or building and they re usually incurred to generate revenue for the business.
Revenue expenditures are usually for short term basis and are operating expenses, that us required to run the business daily.
Based on the above explanation, the answers to the following will be:
a. Paid $78,000 cash to replace a motor on equipment that extends its useful life by four years. - Capital expenditure
b. Paid $390 cash per truck for the cost of their annual tune-ups. - Revenue expenditure
c. Paid $312 for the monthly cost of replacement filters on an air-conditioning system. - Revenue expenditure.
d. Completed an addition to a building for $438,750 cash. - Capital expenditure
Check the attachment for the journal entry
The $78,000 equipment motor replacement and the $438,750 building addition are capital expenditures. The $390 truck tune-ups and the $312 for air-filter replacements are revenue expenditures. Relevant journal entries: 'Equipment' debited and 'cash' credited $78,000, then 'Building' debited and 'cash' credited $438,750.
The transactions can be classified as either a revenue expenditure or a capital expenditure. 1. Paying $78,000 cash to replace a motor on equipment that extends its useful life by four years and completing an addition to a building for $438,750 cash are considered capital expenditures because they are significant investments that will benefit the company for more than one accounting period. 2. Paying $390 cash per truck for the cost of their annual tune-ups and paying $312 for the monthly cost of replacement filters on an air-conditioning system are both classified as revenue expenditures because they only benefit the current accounting period. The journal entries to record transactions A and D would be: Equipment (Debit $78,000), Cash (Credit $78,000) and Building (Debit $438,750), Cash (Credit $438,750).
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Comparative Balance Sheet
(dollars in thousands)
This Year Last Year
Assets
Current assets:
Cash $ 976 $ 1,920
Accounts receivable, net 15,000 10,050
Inventory 10,000 8,440
Prepaid expenses 1,860 2,220
Total current assets 27,836 22,630
Property and equipment:
Land 6,600 6,600
Buildings and equipment, net 19,800 19,600
Total property and equipment 26,400 26,200
Total assets $ 54,236 $ 48,830
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 10,100 $ 8,600
Accrued liabilities 720 1,000
Notes payable, short term 360 360
Total current liabilities 11,180 9,960
Long-term liabilities:
Bonds payable 6,250 6,250
Total liabilities 17,430 16,210
Stockholders' equity:
Common stock 860 860
Additional paid-in capital 4,500 4,500
Total paid-in capital 5,360 5,360
Retained earnings 31,446 27,260
Total stockholders' equity 36,806 32,620
Total liabilities and stockholders' equity $ 54,236 $ 48,830
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
Sales $ 85,000 $ 80,000
Cost of goods sold 55,000 51,000
Gross margin 30,000 29,000
Selling and administrative expenses:
Selling expenses 9,100 8,600
Administrative expenses 12,600 11,600
Total selling and administrative expenses 21,700 20,200
Net operating income 8,300 8,800
Interest expense 750 750
Net income before taxes 7,550 8,050
Income taxes 3,020 3,220
Net income 4,530 4,830
Dividends to common stockholders 344 645
Net income added to retained earnings 4,186 4,185
Beginning retained earnings 27,260 23,075
Ending retained earnings $ 31,446 $ 27,260
Required: Compute the following financial data for this year:
1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
Answer:
A.
This year $30,000/$85,000 = 35.3%
Last Year $29,000/$80,000 = 36.3%
B.
This year $4,186/$85,000 = 4.9%
Last Year $4,185/$80,000 = 5.2%
C.
This year $4,186/$54,236 = 7.7%
Last Year $4,185/$48,830 = 8.6%
D.
This year $4,186/$36,806 = 11.4%
Last Year $4,185/$32,620 = 12.8%
Explanation:
A. Gross Margin % measures the profitability of a Business based on its direct input costs (that is having not considered its indirect costs which includes the selling , general and administrative costs)
It is derived as Gross Margin divided by Net sales x 100%
B. Net profit % = is a measure of profitability of a business in relation to its sales. All relevant costs (except dividend payable to common stock holders) would have been considered in arriving at the applied profit
It is derived as Net Income divided by Net sales x 100%
C. return on total Assets. This is a measure of a business profitability in relation to its investments in Assets. The higher the rate the better a firm is said to be in its conversion process
It is derived as Net income divided by Total Assets x 100%
D. Return on Equity is a measure of profitability in relation to common stock holders investment in shares in a business. The higher the rate, the better the adjudged performance of the business by the shareholders.
It is derived as Net income divided by total shareholders equity x 100%
To Develop a Pareto chart using this information the recommendations would you make:
Know more :
The correct answer to this open question is the following.
Unfortunately, the question does not attach the check sheet with the needed information.
However, we can say that the Pareto chart helps us understand where the priority is to focus on it. The Pareto chart is based on the 80%-20% rule. The Pareto chart says that 20% of the solutions help resolve 80% of the issues.
So Mary Beth Marrs, the manager of the apartment complex must focus on issues such as the parking lot, the ground, and the pool, to appease most of the people and diminish the complaints.
Answer:
The correct answer is letter "C": natural gas refinery.
Explanation:
Process cost systems are used by companies which production process go through several steps manufacturing large batches of homogeneous products. Process costing uses a Work-In-Progress (WIP) account for the progress of the production. Typical examples of industries that use the process costings system are petroleum and paint.
A process cost system would be appropriate for a jet airplane builder and natural gas refinery.
A process cost system would be most appropriate for a jet airplane builder and natural gas refinery. Both of these industries involve the production of a large number of identical units and require the accumulation of costs by department or process.
In a jet airplane builder, each department would be responsible for a specific process such as assembling the fuselage, attaching the wings, or installing the engine. The costs incurred in each department, such as labor, materials, and overhead, would be accumulated separately to determine the total cost of producing each airplane.
In a natural gas refinery, the production process involves multiple stages such as separating impurities, distillation, and purification. Each stage would have its own associated costs, and a process cost system would allow for the tracking and allocation of costs to each stage.
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Answer and Explanation:
Given:
Product 1 Product 2 Product 3
Cost of product $20 $90 $50
Selling price $40 $120 $70
Selling cost $6 $40 $10
Computation:
Product 1 Product 2 Product 3
Product Cost $20 $90 $50
N.R.V ($40-$6)=$34 ($120-$40)=$80 ($70-$10)=$60
Per Unit Inventory Value $20 $90 $50
Answer:
The correct answer is letter "B": integration.
Explanation:
Advertising integration refers to bundling all mediums of communication possible business can use to promote its goods or services. This strategy reinforces the firm market position by repeating its advertising message constantly creating consistency and reducing the stress of having to create a different marketing approach for each advertising channel.