You are evaluating two different silicon wafer milling machines. The Techron I costs $234,000, has a three-year life, and has pretax operating costs of $61,000 per year. The Techron II costs $410,000, has a five-year life, and has pretax operating costs of $34,000 per year. For both milling machines, use straight-line depreciation to zero over the projectâs life and assume a salvage value of $38,000. If your tax rate is 35 percent and your discount rate is 10 percent. Required:
Compute the EAC for both machines.
Answers
T-1:
Table-1 vide annex
Applying EAC formula
c = \frac{r(NPV)}{(1-(1+r)^{-n} )}
c: equivalent annuity cash flow
NPV: Net present value
r: rate per period
n: number of periods
we have
c = $ - 98 982,63
T-2
Table-2 vide annex
Applying EAC formula
c = \frac{r(NPV)}{(1-(1+r)^{-n} )}
c: equivalent annuity cash flow
NPV: Net present value
r: rate per period
n: number of periods
we have
c = - $ 97 511.17
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The projected cash flow for the next year for Minesuah Inc. is $100,000, and FCF is expected to grow at a constant rate of 6%. If the company's weighted average cost of capital is 11%, what is the value of its operations?
Units in beginning inventory 300
Units produced 15,000
Units sold ($300 per unit) 12,700
Variable costs per unit:
Direct materials $20
Direct labor $60
Variable overhead $12
Fixed costs:
Fixed overhead per unit produced $30
Fixed selling and administrative $140,000
Required:
1. How many units are in ending inventory?
$ _______ units
2. Using variable costing, calculate the per-unit product cost.
$_____________
3. What is the value of ending inventory under variable costing?
$___________
Answers
Answer:
1. Ending inventory = Beginning inventory + Production - Sales
= 300 units + 15,000 units - 12,700 units
= 2,600 units
2. Per unit Product Cost Using Variable Costing
$
Direct material 20
Direct labor 60
Variable overhead 12
Product cost 92
3. Value of ending inventory under variable costing
= 2,600 units x $92
= $239,200
Explanation:
The units of ending inventory is calculated as beginning inventory plus production minus sales.
Per unit product cost is the aggregate of variable cost per unit. This includes direct material cost, direct labour cost and variable overhead.
Value of ending inventory is the product of units of ending inventory and per unit product cost.
Answers
Answer:
Real Surplus is $200 billion
Explanation:
Inflation = 14%
Debt = $4 trillion = $4,000 billion
Nominal deficit = $360 billion
Real Deficit = Nominal deficit - (Inflation*Debt)
= $360 - 14% * 4,000
= $360 - 560
= -$200
Hence, the answer is Real Surplus of $200 billion
$
6.50
Direct labor
$
6.60
Variable manufacturing overhead
$
3.75
Fixed manufacturing overhead
$
3.45
An outside supplier offered to supply RST Company this part at $18 per unit. If RST Company decides not to make the parts, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost. The annual financial advantage (disadvantage) for the company as a result of buying these parts from the outside supplier rather than making them internally would be:
($186,200)
($87,400)
($43,700)
$87,400
Answers
Answer:
($43,700)
Explanation:
38,000 units produced:
- Direct materials $6.50
- Direct labor $6.60
- Variable manufacturing overhead $3.75
- Fixed manufacturing overhead $3.45
- total cost per unit = $20.30
outside supplier offers parts at $18 per unit
fixed manufacturing overhead is unavoidable
Alternative 1 Alternative 2 Differential
keep producing buy amount
Prod. cost $771,400 $0 $771,400
Purchase cost $0 $684,000 ($684,000)
Unavoidable costs $0 $131,100 ($131,100)
total $771,400 $815,100 ($43,700)
The financial disadvantage of purchasing the parts from an outside vendor = ($43,700)
Answers
Answer:
Variable overhead rate variance = $ 875 favorable
Variable overhead efficiency variance = $ 4,185 favorable
Variable overhead cost variance = $5,060 Favorable
Explanation:
Standard hours = 1 hr x 2600 units = 2600 hours
Standard rate = $3.10
Actual hours = 1,250 hours
Actual rate = $2.40
Variable overhead rate variance = ( Standard Rate - Actual Rate ) x Actual Hrs
= ( $ 3.10 - $2.40 ) x 1250 Hrs
= $0.7 x 1250
=$ 875 favorable
Variable overhead efficiency variance = (Standard hours - Actual hours) x Standard Rate
= (2600 - 1250 ) x $ 3.10
= $ 4,185 favorable
Variable overhead spending variance = Variable overhead rate variance + Variable overhead efficiency variance
= $875 + $4,185
= $ 5,060 favorable
Variable overhead cost variance = Standard cost - Actual Cost
= (2600 X 3.10) - (1250 X 2.40) = 8,060 - 3000
= $5,060 Favorable
Answers
Answer:
False negative
Explanation:
A false negative may be defined as the outcome where the outcome of the binary classification process the model incorrectly determines or predicts the negative class.
In the context, though the employee have access to open the door as a part of his job, the employee could not open the door by scanning his badge. So this may be considered as a false negative as the employee could not open the door inspite of having access to the door.
Answers
Answer:
1) if the FED decides to strengthen then dollar, it will make US exports more expensive and imports cheaper. That will cause net exports to decrease, i.e. there will be less exports and more imports.
A strengthening of the US dollar helps importing companies because they will buy cheaper goods from abroad and will be able to sell them at higher domestic prices. On the other hand, exporting companies will be hit because hey loss competitiveness since their products will be more expensive.
2) If the FED decides to weaken the US dollar, the opposite will happen. Exporting companies will be favored, while importing companies will be hurt. The country will start to export more and import less.
3) Generally, the FED intervenes market through its money supply policy. When the interest rate increases or the money supply increases, the value of the US dollar will tend to lower. Even if expansionary monetary policy doesn't have an immediate impact, the expectations do matter. If people expect a devaluation of the US dollar, they will start to buy foreign currencies, which in turn will end up devaluating the US dollar. It is a self-fulfilled prophecy.
Another way the FED impacts businesses is through the interest rate. Lower interest rates will increase both domestic and foreign investment in the US.