Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Matheson Electronics' Canadian Branch will help introduce into Canada the just developed new electronic device which, when mounted on an automobile, will tell the driver how many miles the automobile is getting per gallon of gasoline. The device can be mounted on any model of automobile in a few minutes time for negligible cost.The company is anxious to begin production and distribution of the new device. To this end, marketing and cost studies have been made to determine probable costs and market potential. These studies have provided the following information:a. New equipment would have to be acquired in order to produce the device. The equipment would cost $365,000 and have a 12-year useful life. After 12 years, the equipment would have a salvage value of about $25,000.b. Sales in units over the next 12 years are projected to be as follows:Year Sales in units1 ......................... 10,0002 ....................... 16,0003 ......................... 19,0004-12 .................... 22,000c. Production and sales of the device would require working capital of $82,000 in order to finance accounts receivable, inventories and day-to-day cash needs. This working capital would be released at the end of the project's life.d. The devices would sell for $35 each; variable costs of production, administration & sales would be $15 per unit.e. Fixed costs for salaries, maintenance, property taxes, insurance and MACRS 7-year depreciation on the equipment would total $135,000 per year. (Depreciation is based on original cost times the MACRS depreciation %'s per year, using the ½ year convention: Yr1=14.29%; Yr2=24.49%; Yr3=17.49%; Yr4=12.49%; Yr5=8.93%; Yr6=8.92%; Yr7=8.93% and Yr8=4.46%.) No depreciation would be taken after year 8.f. In order to gain rapid entry into the market, the company would have to advertise heavily. The advertising program would be:Years 1-2 ................................ $ 125,000 per yearYear 3 ................................ 110,000 per yearYears 4-12 ............................. 80.000 per yearg. Matheson Electronics' Board of Directors has specified that all new product lines must promise a return of at least 14% (percent) in order to be acceptable (& must be acceptable in Canada as well).h. The average income tax rate to use in this analysis is 40%Required (label each answer prominently):1. Compute the net cash inflow (cash receipts less yearly cash operating expenses) anticipated from the sale of the device for each of the 12 years.2. Using the data from 1. above and other data in the problem, determine the NPV (net present value) of the proposed investment.3. Compute the IRR (internal rate of return) use interpolation.Based on the decision criteria available, should the project be accepted? Why or why not?
Rayya Co. purchases and installs a machine on January 1, 2013, at a total cost of $105,000. Straight-line depreciation is taken each year for four years assuming a seven-year life
Sony manufactures battery for Iphone 6+. The average costs to manufacture batteries are $4 for 10,000 ad $2.67 for 30,000. Assuming the total cost function is linear, what will be
how variable cost help in decision making.with suitable example
Jp Rhodes started a bowling club called " bowl them over". The following transactions took place 4 March 2012. 1. Bowling LTD transferred R20 000 bank account of the club as an in
what is a cost sheet? what are its advantages?
Logan Corporation issued $800,000 of 8% bonds on October 1, 2006, due on October 1, 2011. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to y
Materials Transaction i. Purchase of Materials on Credit ii. Return of Materials to Suppliers iii. Purchase of Materials in Cash. The above transactions affect both t
Weighted Average Method - Work in Progress While this method is employed, all costs of production are considered in assigning costs to inventory. The method puts together open
what is the different between Financial accounting and management accounting?
given the following : Constant $21,800 Std.error of Y Est. 4,500 R squared 0.7832 Observations # 22 X coefficient 11.75 Std.error of Coef.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd