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Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot. The building and equipment are estimated to cost $1,100,000 and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Munster’s required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows: Revenue $450,000 Less: Material cost $ 60,000 Labor 100,000 Depreciation 110,000 Other 10,000 280,000 Income before taxes 170,000 Taxes at 40% 68,000 Net income $102,000 (a) Determine the net present value of the investment in the service center. Should Munster invest in the service center?
(b) Calculate the internal rate of return of the investment to the nearest ½ percent.
(c) Calculate the payback period of the investment.
(d) Calculate the accounting rate of return.
Find out the balance sheet inventory carrying value. D etermine the amount of the loss. (Input all amounts as positive values. Omit the "$" sign in your response.)
Illustrate what is the total amount of other financing sources to be recognized on the fund-based financial statements over this six-year period?
Purpose a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June.
Calculation of total variable cost and contribution income statement - Assume the same unit costs in all years. Total variable costs on the company's 2007 contribution income statement will be?
Evaluate smith's tax expense for the year ending 31 st December, 2012? Evaluate smith's tax liability for the year ending 31 st December, 2012?
Illustrate what type of cash flow pattern is this? What formula would you use to solve this problem? (Write down the formula!) When you put the above given numbers into your formula, do you get the same answer? Why or why not?
Illustrate what is, most likely, the tax bill excluding interest on underpayments but including penalties other than the underpayment penalty of IRC 6654.
Is book value an estimation of an asset's fair market value? Describe.
It would save $6,300 per year over the present method of delivering pizzas. In addition, it would result in the sale of 2,300 more pizzas each year. The company realizes a contribution margin of $1 per pizza.
Create the journal entry to record the transaction and the interest expense at the end of the first year.
For each cost listed above, show whether it is a direct or indirect cost of the Immunization Center, whether it is indirect or direct cost of immunizing exacting patients.
After the 2012 financial statements were issued, the case was settled with the IRS for $1,200,000. Illustrate what amount, if any, should be reported as a liability for this contingency as of December 31, 2012?
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