User Account

All Pages

Compute the internal rate of return for each investment

Assignment Help Accounting Basics
Reference no: EM132772324

Problem - Munch N' Crunch Snack Company is considering two possible investments: a delivery truck or a bagging machine. The delivery truck would cost $43,056 and could be used to deliver an additional 95,000 bags of pretzels per year. Each bag of pretzels can be sold for a contribution margin of $0.45. The delivery truck operating expenses, excluding depreciation, are $1.35 per mile for 24,000 miles per year. The bagging machine would replace an old bagging machine, and its net investment cost would be $61,614. The new machine would require three fewer hours of direct labor per day. Direct labor is $18 per hour. There are 250 operating days in the year. Both the truck and the bagging machine are estimated to have seven-year lives. The minimum rate of return is 13%. However, Munch N' Crunch has funds to invest in only one of the projects.

Required -

a. Compute the internal rate of return for each investment.

b. Provide a recommendation to management in a memo.

Reference no: EM132772324

Questions Cloud

Determine current industry condition : Determine current industry condition and industry expected future condition based on Porter's five competitive forces of sime darby plantation?
What are some of psychological effects cyberbullying have : Define cyberbullying. Do you know anyone who has been bullied online? Have you ever been bullied online? What are some of the psychological effects.
Cyber security : Select five articles related to your area of interest from your top journals.
Make the relevant statement of comprehensive income : Make Non- Current Asset Cost A/c, Provision for Depreciation A/c, Depreciation Expenses A/c and where relevant the Disposal A/c
Compute the internal rate of return for each investment : The delivery truck would cost $43,056 and could be used to deliver an additional 95,000 bags of pretzels per year. Compute the internal rate of return
History of the data encryption standard : Evaluate the history of the Data Encryption Standard (DES) and then how it has transformed cryptography with the advancement of triple DES.
Overview of the sime darby plantation : Overview of the SIME DARBY PLANTATION and provide reasons why you choose that company. (Describe the history, vision, mission)
Examine the stuxnet worm : The Stuxnet worm damaged physical equipment at the Iranian nuclear facilities it infected.
What else should the manager consider in the analysis : The manager believes that the new investment will result in direct labor savings of $350,000 per year for 10 years. What else should the manager consider

Reviews

Write a Review

Accounting Basics Questions & Answers

  What would the contribution margin ratio be

Stand Todd Inc want to manufacture a new cell phone that can be worn on the wrist. What would the Contribution margin ratio be

  What is the proportion of nico portfolio invested in stock

Nico owns 100 shares of Stock X which has a price of $12 per share and 200 shares of Stock Y which has a price of $3 per share. What is the proportion of Nico's portfolio invested in stock X?

  What was the account balance at the end of specific year

At the end of the sixth year, the account balance was transferred to a bank paying 10%, and annual deposits of $80,000 were made at the end of each year from the seventh through the tenth years. what was the account balance at the end of the tenth..

  Transactions between partners and partnerships

The following article discusses the risk involved in treating partners as employees. One of the primary risks involved in the article relates to employment tax issues. Review the article

  What amounts can isaac claim on return

Isaac works for a domestic fruit importer and travels, What amounts can Isaac claim on his 2018 return on Form 1116 Foreign Income Tax Credit?

  What is the rate of return of this opportunity

You have an investment opportunity that requires an initial investment of $5000 today and will pay $6000 in one year. What is the rate of return of this opportunity?

  Question - Profitability with resource limitations

Question - Profitability with resource limitations. Assuming unlimited labor hours, which product should be promoted in the advertising campaign

  Determine the number of current ratio as of December

Use this information to determine the number of current ratio as of December 31, 2018. Determine the book value of the investment

  Discuss the characteristics of the principle based

Discuss the characteristics of the principle based on the code.

  Differentiate types of income and expenditures

The assignment requires an email to be sent to fictional clients Daniel B. Butler and Freida C. Butler. They reaching out by email, asking for help.

  Which non-sampling risk arises whenever an auditor

Which Non-sampling risk arises whenever an auditor? does not examine all of the items in population. / examines too many items in a population.

  Calculate the amount of pecuniary damages

Required: Calculate, with supporting evidence, the amount of pecuniary damages the court should award to the company. You may assume a cost of equity of 11%

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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