User Account

All Pages

What is net present value of increase in contribution margin

Assignment Help Financial Accounting
Reference no: EM132784850

Question - Data relating to Randall Ltd.'s single product are as follows:

Selling price $5.47

Direct materials 0.82

Direct labour 0.81

Overhead (60% fixed) 1.00

Gross Profit $2.84

The company currently produces 51937 units.Randall Ltd. is considering purchasing a new machine that is expected to decrease variable costs by 17%. The expected useful life of the new machine is 10 years.

Assuming a weighted average cost of capital of 8%, what is the net present value of the increase in contribution margin relating to this investment?

a. $120268

b. There is a decrease in the contribution margin.

c. $196587

d. $8302

Reference no: EM132784850

Questions Cloud

Identify at least two preventive that would best mitigate : Identify at least two preventive, detective, and/or corrective controls that would best mitigate the threats? An employee gained access to company's sensitive
What are debt and equity investments and how do they differ : What are debt and equity investments and how do they differ? Why does the degree of influence by investor over investee affect accounting for equity investments
Which of the statements in financial accounting is incorrect : Which of the statements in financial accounting is incorrect? The actual position of equity accounts is in credit. / The actual balance of asset accounts
What are influential tactics that are known : What are influential tactics that are known to be used by leaders? Which tactic would be seen best for change?
What is net present value of increase in contribution margin : Assuming a weighted average cost of capital of 8%, what is the net present value of the increase in contribution margin relating to this investment
How does the given change the way you do business : We looked at networks in general; however, in this discussion we're looking at wireless networks, mostly focusing on mobile networks.
How many kilograms were purchased : The standard cost of the material was P2.00 per kilogram and there was an unfavorable materials price variance of P3,250. How many kilograms were purchased
Estimate the effect on the company income before tax : Estimate the effect on the company's 2017 income before tax of capitalizing these operating leases
What is the book value of the mine on december : In 2020, 3,000,000 tonnes were extracted from the mine. They were all sold before the end of the year. What is the book value of the mine on December 31, 2020?

Reviews

Write a Review

Financial Accounting Questions & Answers

  The income statement approach to estimating uncollectible

the income statement approach to estimating uncollectible accounts expense is used by landis company.on february 28 the

  What is the amount of cash paid to bondholders for interest

Interest is payable semiannually each April 1 and October 1. What is the amount of cash paid to bondholders for interest during Year 1?

  Compute what amount would be reported by rockhouse

Compute what amount would be reported by Rockhouse under the operating activities section in the statement of cash flows for the year ended June 30, 20X5

  Find what interest rate must earn

Today you make a deposit of $5000. You make 5 additional annual deposits growing at 5 percent. What interest rate must you earn?

  Compute what minimum line of credit to request from lender

Compute Do you believe that the company needs outside financing? What is the minimum line of credit to request from a lender?

  Initial entry to record issuance using proportional method

Horrible Inc. issues 10,000, $100 face value, 8% debt with detachable warrants that permit the holder to purchase one share of stock for $18 per share. The bonds were issued at 102. Immediately after issue the bonds were selling for 98 without the wa..

  Why public companies prepare and distribute quarterly

Briefly explain two reasons why public companies prepare and distribute quarterly and annual financial statements to shareholders.

  Depict the regression line on your graph

Depict the regression line on your graph. Use your graph to calculate the regression line using the criteria of economic plausibility, goodness of fit as well as significance of the independent variable.

  Should the company xyz incorporate the feature

Assuming the discount rate is 6%, should the company XYZ incorporate the feature based on Net Present Value (NPV) Analysis?

  Create the journal entries that would appear in txa ltd

TXA Ltd acquired a machine from Blue Ltd, Make the journal entries that would appear in TXA Ltd.'s books to account for the acquisition of the Machine.

  What is the roa for wu tea ltd

What is the ROA for Wu's Tea Ltd? What would their ROA be if their investment in Unlucky Coffee Ltd was accounted for as a financial instrument?

  Which statements describes the closing off process

Which statements describes the closing off process? To transfer income account balances to the expense account/ To allocate real account balances to SOFP

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