User Account

All Pages

What is the net present value of expanding the production

Assignment Help Accounting Basics
Reference no: EM132764681

Question: X Company is thinking about expanding the production of Product A and eliminating Product B. Expanding sales of A should result in additional firm profits of $12,000 per year for the next 6 years, but will require the purchase of some additional equipment, costing $19,000. This equipment should be worth $3,500 at the end of 6 years.

By eliminating Product B, the firm will lose the product's $6,000 annual contribution margin but will save $12,000 of annual fixed costs.

Assuming a discount rate of 4%, what is the net present value of expanding the production of Product A and eliminating Product B?

Reference no: EM132764681

Questions Cloud

Explain the fifo method of inventory costing : When the company is reducing the income in the current year, but their accountant said to make a large purchase of inventory at year-end.
What would the tax on stans income be : Access the income tax rate schedules. If Stan's parents elected to report Stan's income on his parents' return, what would the tax on Stan's income be?
What is the differential cost between the two alternatives : What are the Characteristics of Flexible Budgets? Give an example of Saudi Company that prepare them. Karim Corporation is considering two alternatives.
Which weakness in the filipino character is pointer to : Teacher observes that when students submit report, the more ornate and artistic the folder is, the less substantial the report. Which weakness in the Filipino.
What is the net present value of expanding the production : X Company is thinking about expanding the production of Product A and eliminating Product B. Expanding sales of A should result in additional firm profits.
Unfavourable price movements : Which strategies she can implement and how she will design them? Use diagrams to explain you answer.
What is jasmines gross tax liability : During 2019, Jasmine (age 12) received $6,800 from a corporate bond. She also received $660 from a savings account established for her by her parents.
Describe how the credit crisis may have adversely : Describe how the credit crisis may have adversely affected many people beyond homeowners and mortgage companies. Do you believe the impact of the credit
Discuss the basic principles for assessing internal controls : Discuss the impact of Sarbanes-Oxley on a company's internal controls. Be sure to define internal controls and discuss the basic principles for assessing.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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