Reference no: EM132526998
Point 1: Diana's friend, using her marketing knowledge has recently undertaken, at the cost of $3,000, a detailed analysis of the emerging trends in the furniture industry. Based on the findings, she suggested that, to remain competitive, the business must add at least one new type of furniture to its existing product mix. Working together with Diana, who has some accounting and finance knowledge, she has come up with two propositions, the Cora and the Dona, which are new design wooden center tables. Due to limited funds, Diana must select only one project.
Point 2: The Cora is expected to be produced and sold in monthly batches of 5,000 units. Selling price is expected to be $12 in the first 2 years, rising by 5% each year in the following 3 years. Variable production costs would amount to $8 per unit and this is expected to rise by 3% annually over the next 5 years. A special wood cutting machine will have to be bought immediately, costing $900,000 and scrap value is expected to be $50,000 at the end of its lifetime.
Point 3: The Dona will require investment in a new machine costing $500,000, scrap value being $ 25,000. Monthly production is expected to be 4,000 units. Since it will be using better wood quality, variable costs are expected to be $10 per unit, rising by 5% each year. Selling price would be $13 and this is expected to remain constant.
Point 4: Both projects would necessitate additional working capital of $50,000 immediately, which will be recovered in full at the end of the project's life.
Point 5: Diana is of the view that since Dona requires lower investment and has a higher selling price, it will be more profitable to invest in this project.
Required:
Question 1: Advise Diana which project is the better investment, supporting your answer with relevant calculations.
|
Calculate predetermined overhead rates per machine hour
: Calculate the predetermined overhead rates per machine hour based on practical capacity, normal capacity and budgeted capacity respectively.
|
|
Design and implement simple software solutions
: Write and implement a solution algorithm using basic programming constructs. S3. Demonstrate debugging and testing skills whilst writing code
|
|
Critical component for ig implementation
: With this detail in mind, briefly state why the e-Mail has become a critical component for IG implementation?
|
|
Ultra wideband wireless technology
: This is a research project that will require the use of the library (LTU preferred) and/or the Internet. What the future may hold for this technology.
|
|
Find advise diana which project is the better investment
: Diana's friend, using her marketing knowledge, Advise Diana which project is the better investment, supporting your answer with relevant calculations.
|
|
How flexner report contributed to medical education reform
: The Association of American Medical Colleges was founded in 1876. It set minimum standards for medical education but was unable to enforce its recommendations.
|
|
Logarithms - benfords law and fraudulent data assignment
: Logarithms, Benford's Law and Fraudulent Data Assignment Help and Solution - Recall and use typical programming constructs
|
|
Explain the incompetency of the health care professional
: In this module, you learned about the medical education system and requirements of licensing. As you can imagine, the competency of medical professionals.
|
|
What are three purposes of budgeting
: How does the management by exception concept relate to budgeting? What are five basic principles which, if followed, should improve the probability
|