Calculate the net present value of ayayai propose investment

Assignment Help Managerial Accounting
Reference no: EM132547134

Ayayai Company manufactures automobile components for the worldwide market. The company has three large production facilities in Virginia, New Jersey, and California, which have been operating for many years. Brett Harker, vice president of production, believes it is time to upgrade operations by implementing computer-integrated manufacturing (CIM) at one of the plants.

Brett has asked corporate controller Connie Carson to gather information about the costs and benefits of implementing CIM. Carson has gathered the following data:

Initial equipment cost  $6,006,000

Working capital required at start-up $600,600

Salvage value of existing equipment $75,075

Annual operating cost savings $840,840

Salvage value of new equipment at end of its useful life $200,200

Working capital released at end of its useful life $600,600

Useful life of equipment 10 years

Ayayai Company uses a 12% discount rate.

Question 1: Calculate the net present value of Ayayai's proposed investment in CIM.

Reference no: EM132547134

Questions Cloud

Determine shares of net income or net loss : Ken Danolo and Jim Goldman form a partnership, investing $96,000 and $168,000, respectively. Determine their shares of net income or net loss
How much is the premiums expense for the year : On January 1, 2019, premiums liability has a balance of P200,000. How much is the premiums expense for the year
Influence on a persons weight genetics : Which do you think has more influence on a persons's weight genetics, upbringing or environment?
Describe the plan for an evidence-based practice project : The proposal is the plan for an evidence-based practice project designed to address a problem, issue, or concern in the professional work setting.
Calculate the net present value of ayayai propose investment : Ayayai Company manufactures automobile components for the worldwide market. Calculate the net present value of Ayayai's proposed investment in CIM.
Laboratory animals for experimental purposes : Discuss the factors you will consider to maintain and keep laboratory animals for experimental purposes.
Differences of photosynthesis and respiratory events : Explain the types, similarities and differences of photosynthesis and respiratory events by specifying their metabolic pathways
Do you think the articles are accurate enough : Do you think the articles are accurate enough to be useful to give to young adolescents and What might you add to this information
What was the South Sea Company : What was the South Sea Company? Was the South Sea Company successful? If yes, in what way? If no, why not? What became of the South Sea Company

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd