Manufactures and sells climate-controlled wine cabinets

Assignment Help Financial Management

Reference no: EM13977769

Hope Corporation manufactures and sells climate-controlled wine cabinets. Its most popular model sells for $3,000 and comes with a basic 90-day warranty. For an extra $150, this warranty is extended to 3 years, and for $300 the warranty is extended for 10 years.

a. If a customer buys a wine cabinet with the basic warranty, how much of the $3,000 paid represents DPGR to Hope?

b. Assume that a customer pays $3,150 to include the extended 3-year warranty. How much of this amount is DPGR?

c. Assume that $3,300 is paid to include the extended 10-year warranty. How much is DPGR?

d. Could the sales agreement be modified so as to increase the amount qualifying as DPGR? Explain.

Reference no: EM13977769

Questions Cloud

Management with regard to financing current operating assets : Explain the three alternative current operating assets financing policies in details. In your opinion, what is the best strategy for management with regard to financing current operating assets? Does the answer vary by industry? Does the answer vary ..

Reflect on the importance of time value of money : Reflect on the importance of time value of money in corporate finance. Also, express your thoughts on how time value of money affects the valuation of a company.

Discount rate-calculate the net present value-payback : Using a 4.5% discount rate, calculate the Net Present Value, Payback, Profitability Index, and IRR for each of the investment projects below (note, the inflows are for each year). Based on your calculations rank the projects and support you answer. A..

Alternative current operating assets financing policies : Explain the three alternative current operating assets financing policies in details. In your opinion, what is the best strategy for management with regard to financing current operating assets? Does the answer vary by industry? Does the answer vary ..

Manufactures and sells climate-controlled wine cabinets : Hope Corporation manufactures and sells climate-controlled wine cabinets. Its most popular model sells for $3,000 and comes with a basic 90-day warranty. For an extra $150, this warranty is extended to 3 years, and for $300 the warranty is extended f..

What is the firms depreciation and amortization expense : The Centennial Chemical Corp. announced that, for the period ending March 31, 2014, it had earned income after taxes worth $5,330,275 on revenues of $13,144,680. The company’s costs (excluding depreciation and amortization) amounted to 61 percent of ..

The concept of accounts payable : The concept of accounts payable is applicable only when a customer buys from a retailer. Amazon does not allow third-party sellers to sell products through its website. It is not uncommon for a big retailer like Amazon to be able to hold products for..

Explain in detail how the four kinds of float : Explain in detail how the four kinds of float (billing, collections, transit and disbursement) can be used to maximize the efficiency of incoming revenues and outgoing expenditures? What kinds of policies can be initiated to facilitate maximum effici..

Interest payable on a loan becomes a liability when : Interest payable on a loan becomes a liability when

User Account

All Pages