John Deere is an American manufacturer of agricultural, construction, and forestry machinery. The company is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $102,400. The equipment will have an initial cost of $403,600 and have a 5-year life. The salvage value of the equipment is estimated to be $77,400. If the discount rate is 10%, what is the internal rate of return? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount.) Multiple Choice Between 12% and 14% Between 8% and 10% Between 10% and 12% Between 6% and 8%
Q: None
A: To begin, the 3-Year Moving Average technique is a methodology that is often used in the field of…
Q: Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three…
A: Step 1: Allocation of advertising costs to the grinding department.Advertising cost =…
Q: Net Present Value-Unequal Lives Dakota Mining Company has two competing proposals: a diamond core…
A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment by…
Q: Equipment purchased on January 3, 2018, for $80,000 was depreciated using the straight-line method…
A: Step 1: Gain on Sale:When a company purchases equipment and, after some years of use, sells the…
Q: Rahul
A: The objective of this question is to perform a horizontal analysis of the comparative income…
Q: Which of the following statements does not describe a characteristic of management accounting? A)…
A: A) Management accounting places a great deal of emphasis on the future.True characteristic:…
Q: Provide all 7 entries
A: The first item details the original 1,000 devices purchased on May 3 for $9 apiece. This results in…
Q: The taxes that the employer must pay are __________. social security and…
A: The question is asking about the types of taxes that an employer is obligated to pay. These taxes…
Q: The fact that generally accepted accounting principles allow companies flexibility in choosing…
A: Explanation:Step 1: Understand the Double-Declining-Balance (DDB) Depreciation MethodThe DDB…
Q: Almond, Inc. uses a balanced scorecard. Match the measures below with the appropriate section of the…
A: The objective of the question is to match the given measures with the appropriate section of the…
Q: please answer in text form and in proper format answer with must explanation , calculation for each…
A: Step 1:Computation of the total current assets of the company on June 30 of the current year:Total…
Q: Guareno Clinic uses client - visits as its measure of activity. During December, the clinic budgeted…
A: The budgeted revenue for December is calculated by multiplying the budgeted number of client visits…
Q: Give me 1 solid paragraph on why strategic management accounting is pivotal
A: Strategic management accounting is pivotal because it provides a forward-looking perspective to the…
Q: Complete the following table by filling in missing amounts. Note: Use 360 days a year. $ Principal…
A: Refer to the attached images for the detailed solutions:
Q: Nachembe Co is a recently established company specialising in the manufacture of a range of drugs…
A: (a) Working Capital Cycle = Inventory Period + Receivables Period - Payables PeriodInventory Period…
Q: Baker Fine Foods has beginning inventory for the year of $12,000. During the year, Baker purchases…
A: Step 1:Given information:Opening cost= $12,000Purchases- $150,000Closing stock= $20,000 Step 2:…
Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…
A: The objective of the question is to prepare the journal entries for LCD’s purchase of the components…
Q: Loega Plc Ltd. sells rocks in Utah. They have supplied the following data: • Units sold: 3,296 •…
A: Step 1: Calculation of contribution margin ratio.Total variable costs = Variable manufacturing…
Q: Exercise 1-12 Differences between Managerial Accounting and Financial Accounting Objective 2 Jenna…
A: Managerial vs· Financial Accounting - Jenna Suarez's SituationsThis exercise highlights the…
Q: Question: Compute the Cost of Goods Sold for a retail merchandiser with the below information: Yard…
A: To compute the Cost of Goods Sold (COGS), we need to use the formula: COGS = (Beginning Inventory +…
Q: John Cush is a producer of knitted cricket jumpers. His most popular selling line is called the…
A: Step 1: Calculate Original BudgetCalculate sales revenue, direct materials cost, direct labour cost,…
Q: Selected data (in thousands) derived from the income statement and balance sheet of Cardinas Corp.…
A: The objective of the question is to prepare the 'Cash flows from (used for) operating activities'…
Q: Mr. Smith decides to feed his pet Doberman pinscher a combination of two dog foods. Each can of…
A: Consider,Plot the points (0,8),(4,0) as shown below,Join these points,Shade the right side of the…
Q: Phelps Glass Incorporated has reported the following financial data: net revenues of $11.9 million,…
A: Calculation of Controllable Margin and CPC at Operating IncomeBased on the provided financial data,…
Q: Misty IT Co provides hardware, software and IT services to small business customers. Mighty IT Co…
A: To answer each question, let's split it down:According to International Financial Reporting…
Q: Santa Fe Retailing purchased merchandise from Mesa Wholesalers with credit terms of 3/10, n/60 and…
A: TransactionNOTESa.For the purchase, we simply debit inventory or merchandise inventory then credit…
Q: Provide 7 graphs In answer
A: Step 1: Introduction to inventory valuationInventory valuation is referred to as that method that…
Q: One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000.…
A: Step 1: Method for distribution of costsTo allocate the machine setup costs, we will distribute the…
Q: The process of determining any differences between a bank statement balance and a checkbook balance…
A: The objective of the question is to identify the correct term for the process of determining any…
Q: Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each…
A: The objective of the question is to calculate the Capital Turnover Ratio for Alpha division, the…
Q: Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each…
A: (a) To find the Invested Assets for the Alpha division, we'll use the ROI formula and rearrange it…
Q: Acme Inc.'s total assets at the beginning of the year amount to $500,000,000, and its total assets…
A: Step 1: Financial Ratios :In management accounting, financial ratios are quantitative measures used…
Q: On May 1, 2022, Barber Company purchased inventory costing $87,000 by signing an 8%, nine-month,…
A: Step 1: Understanding meaning of journal entry:- Journal entry is a recordance of financial event…
Q: 86 86 87 88 E25.6 (LO 2), AN Writing The actual selling expenses incurred in March 2022 by Fallon…
A: A flexible budget is the planning budget forecasted using the actual level of activity instead of…
Q: please answer in text form with proper workings and explanation for each and every part and steps…
A: To address this issue, our initial step is to determine the fraction of the year-end bonus expense…
Q: 1 Let's say Cane received a special order for 5,000 Betas for $42 per unit. What would be the net…
A: DETAILED ANALYSISCalculating the Net Advantage of Accepting a Special OrderScenario:A company…
Q: Cash \table[[Dr., Cr.]. [,610, 10, 640,], [,980, 605.]. [, 10,880,,], [,6,535,,], [Bal. vv, 12,…
A: In double-entry bookkeeping, every transaction is recorded in at least two accounts: as a debit in…
Q: Employees are more likely to apply their personal values to their behaviour when: those values…
A: The question is asking about the circumstances under which employees are more likely to apply their…
Q: Provide Req a,b,c
A: Hello student! When Percentage of Accounts Receivable is used intead of Aging of A/R, it also…
Q: which of the following is true of the effect of net loss on financial statements?
A: The objective of this question is to understand the impact of a net loss on a company's financial…
Q: image(11).jpg
A: The image you sent pertains to a property dividend scenario. Let's break down the problem and the…
Q: please answer in text form and in proper format answer with must explanation , calculation for each…
A: The warranty expense shall be recorded in December.869,000 x 3% = 26,070.This shall be recorded as…
Q: a- Find the radius r₁ of the electron in the ground state orbit of doubly ionized potassium which…
A: Step 1: Given : Atomic number Z= 19 Step 2: Formula : Radius of electron in ground state orbit…
Q: Question: What amount of money must be invested today in order to grow to $2,000 in 3 years at an…
A: Given information, Target future value (FV) = $2,000Time (t) = 3 yearsAnnual interest rate (r) = 5%…
Q: Spelman Corporation has Sales of $36,800, Depreciation Expense of $3,000, Interest Expense of…
A: The objective of the question is to calculate the profit margin of Spelman Corporation. The profit…
Q: Provide graph in answer
A: Step 1: Understanding the Data In this phase, you need to carefully examine and understand the data…
Q: None
A: To compute diluted earnings per share:Diluted earnings per share = (Net Income - Preferred…
Q: Calculate the full cost and selling price for the A1997 road: using: a) The Absorption Costing…
A: To calculate the full cost and selling price for the A1997 road using the Absorption Costing method…
Q: John Cush is a producer of knitted cricket jumpers. His most popular selling line is called the…
A: Sales Variance: Your actual sales were £70,000 higher than expected due to increased demand for the…
Q: Exercise 13-3 (Algo) Make or Buy Decision [LO13-3] Troy Engines, Limited, manufactures a variety of…
A: To determine if the outside supplier's offer should be accepted, we need to compare the financial…
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
- Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided manufacturing system. The annual net cash benefits and savings associated with the system are described as follows: The system will cost 9,000,000 and last 10 years. The companys cost of capital is 12 percent. Required: 1. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of five years or less. Would the system be acquired? 2. Calculate the NPV and IRR for the project. Should the system be purchasedeven if it does not meet the payback criterion? 3. The project manager reviewed the projected cash flows and pointed out that two items had been missed. First, the system would have a salvage value, net of any tax effects, of 1,000,000 at the end of 10 years. Second, the increased quality and delivery performance would allow the company to increase its market share by 20 percent. This would produce an additional annual net benefit of 300,000. Recalculate the payback period, NPV, and IRR given this new information. (For the IRR computation, initially ignore salvage value.) Does the decision change? Suppose that the salvage value is only half what is projected. Does this make a difference in the outcome? Does salvage value have any real bearing on the companys decision?Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Patz Corporation is considering the purchase of a computer-aided manufacturing system. The cash benefits will be 800,000 per year. The system costs 4,000,000 and will last eight years. Compute the NPV assuming a discount rate of 10 percent. Should the company buy the new system? 2. Sterling Wetzel has just invested 270,000 in a restaurant specializing in German food. He expects to receive 43,470 per year for the next eight years. His cost of capital is 5.5 percent. Compute the internal rate of return. Did Sterling make a good decision?
- The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $55,000. The machine would replace an old piece of equipment that costs $14,000 per year to operate. The new machine would cost $6,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $20,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine? 2. What is the annual incremental net operating income provided by the new bottling machine? 3. What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return? 4. What is the simple rate of return on the new bottling machine? (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.)John Deere is an American manufacturer of agricultural, construction, and forestry machinery. The company is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $102,400. The equipment will have an initial cost of $403,600 and have a 5-year life. The salvage value of the equipment is estimated to be $77,400. If the discount rate is 10%, what is the internal rate of return? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount.) Multiple Choice Between 12% and 14% Between 8% and 10% Between 10% and 12% Between 6% and 8%Schultz company is considering purchasing a machine that would cost $478,800 and have a useful life of 5 years. The machinery would reduce cash operating costs by $114,000 per year. The machine would have a salvage value of $6,200. Schultz Company prefers a payback period if 3.5 years or less. compute the payback period for the machine. what does this mean?
- The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $69,000. The machine would replace an old piece of equipment that costs $17,000 per year to operate. The new machine would cost $7,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $23,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine? 2. What is the annual incremental net operating income provided by the new bottling machine? 3. What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return? 4. What is the simple rate of return on the new bottling machine? (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.) 1. Depreciation expense 2. Incremental net operating income 3 Initial…Super Apparel wants to replace an old machine with a new one. The new machine would increase annual revenue by $200,000 and annual operating expenses by $80,000. The new machine would cost $400, 000. The estimated useful life of the machine is 10 years with zero salvage value. i. Compute the Accounting Rate of Return (ARR) of the machine using the above information. ii. Should Super Apparel purchase the machine if management wants an Accounting Rate of Return (ARR) of 19% on all capital investments? Hint: Use Average Income or Profit after deducting tax, depreciation, and operating expenses.Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $193,900 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual cash flows of $30,600. Management also believes that the new bottling machine will save the company money because it is expected to be more reliable than other rpachines, and thus will reduce downtime. Assume a discount rate of 7%. Click here to view the factor table. Calculate the net present value. (If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round present value answer to 0 decimal places, eg. 125) Net present value $ How much would the reduction in downtime have to be worth in order for the project to be acceptable? (Round answer to 0 decimal places, e.g. 125.)
- Crazy Carnival Industries is thinking of purchasing a machine that will produce plastic junkanoo dresses. The machine would be used for five years, would cost $35,000, would have a $5,000 residual value, and would increase annual net cash inflows by $8,800. Crazy Carnival uses the straight-line method of depreciation. Using the above facts and the present value factors below, calculate the accounting rate of return (if necessary, round off and carry to one decimal place)Ballard MicroBrew is considering the purchase of an automated bottling machine for $55,000. The machine would replace an old piece of equipment that costs $14,000 per year to operate. The new machine would cost $6,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $20,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine? 2. What is the annual incremental net operating income provided by the new bottling machine? 3. What is the initial investment used for calculating the machine's simple rate of return? 4. What is the simple rate of return on the new bottling machine? Note: Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%. 1. Depreciation expense 2. Incremental net operating income 3. Initial investment 4. Simple rate of return %A start-up biotech company is considering making an investment of $100,000 in a new filtration system. The associated estimates are summarized below: Annual receipts $75,000 Annual expenses $45,000 Useful life 8 years Salvage value $20,000 Straight line depreciation will be used, and the effective income tax rate is 20%. The Aftertax MARR is 15% per year. Determine whether this investment is an attractive option for the company.