Calculate the net present value of new manufacturing plant

Assignment Help Cost Accounting
Reference no: EM132561738

Currently due to the coronavirus health crisis there is a great demand for medical face masks. Smooth Equipment company is considering purchase of a piece of land to build a manufacturing plant to produce medical face masks. The purchase price for the land is $100,000 and preparatory work will cost $34,200.

The manufacturing plant would be useable for 10 years. Company consultants recommend the new plant would cost the company $20,000 per year less to operate than the company's current production line. The current production plant also will last 10 more years. For a face mask manufacturing project, the company can borrow money at 4 per cent from the federal government.

Required:

Question 1: Calculate the net present value of the new manufacturing plant.

Reference no: EM132561738

Questions Cloud

Explain the probability of a couples children : Explain the probability of a couples children having Cystic Fibrosis or being carriers for the CF gene.
Is an important consideration in capital budgeting : Currently due, Is this an important consideration in capital budgeting? Justify your answer. Explain three limitations of the payback method.
What is the present value of the benefits of owning that car : What is the present value of the benefits of owning that car, i.e., saving on rental expenses and selling the car (answer 0+ decimal)? Should you buy the car
Breifly explanation dna and chromosomes : Breifly explanation DNA and chromosomes, genes, and dominant and recessive alleles of these topics in plain, non-technical language.
Calculate the net present value of new manufacturing plant : Calculate the net present value of the new manufacturing plant.
Human evolution now than 30-50 years ago : Why is it more important for scientist to understand human evolution now than 30-50 years ago?
Complete the company residual income for the year : Complete the company's residual income for the year. Juniper Design Ltd. of Manchester, England is a company specializing in providing design services
How to compute the turnover for alyeska services company : How to Compute the turnover for Alyeska Services Company. Compute the return on investment (ROI) for Alyeska Sevices Company
Determine the total standard cost of labor allowed : Determine the total standard cost of material allowed, standard hours allowed for labor and total standard cost of labor allowed

Reviews

Write a Review

Cost Accounting Questions & Answers

  Evaluate medical expense deduction

Dotty's insurance company reimbursed therefore $8,800 of these expenses. If Dotty's AGI is $47,200, evaluate her medical expense deduction.

  Write a 7 - 8 page double spaced paper answering and

write a 7 - 8 page double spaced paper answering and demonstrating with calculations and financial data the following

  Evaluate what was the variable overhead efficiency variance

The standard hours allowed for the definite output of the month totaled 7,070 machine-hours. Evaluate what was the variable overhead efficiency variance for month?

  How to prepare a statement of cash flows

At December 31, 009, Cash was $72,650, Accounts Receivable was $35,250, and Accounts Payable was $32,500. Prepare a statement of cash flows for the year 2009 for Lander.

  Questionproblem 1 - nancy company has budgeted sales of

questionproblem 1 - nancy company has budgeted sales of 750000 with the subsequent budgeted costsdirect materials

  Total financing sources in the amount

When the bonds are issued, the Enterprise Fund will report total financing sources in the amount of

  Hig-low method to estimate companys utilities cost behavior

Use the hig-low method to estimate the companys utilities cost behavior and state the cost formula and predict the utilities cost for a month in which 12,000 pounds of the product were produced

  Prepare a pro forma income statement for the ebit level

Find the EBIT indifference level associated with the two financing plans - Prepare a pro forma income statement for the EBIT level solved for in part a that shows that EPS will be the same regardless whether Plan A or B is chosen.

  How much zinc in pounds was available for sale

Accountants frequently refer to "goods available for sale."  Is this concept the same as ending inventory?  How much zinc, in pounds, was "available for sale?"

  Prepare the intangible assets section of montana matt

Prepare the intangible assets section of Montana Matt's Golf Inc. at December 31, 2013. How much amortization expense is included in Montana Matt's income for the year ended December 31, 2013? Show all supporting computations.

  Prepare an entry to allocate over- or underapplied overhead

Prepare an entry to allocate over- or underapplied overhead to Work in Process.

  The company plans to carry ending merchandise inventory

Hardy Company's cost of goods sold is consistently 60% of sales.

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