Month: June 2022
(Solved):Q: a Discuss the co…
a Discuss the conditions under which the introduction of ABC is likely to be most effec- tive, paying particular attention to:
^{● }product mix
^{● }the significance of overheads and the ABC method of charging costs
^{● }the availability of information collection procedures and resources, and
^{● }other appropriate factors.
b Explain why ABC might lead to a more accurate assessment of management perform- ance than absorption costing
(Solved):Q: Suppose you find…
(Solved):Q: Walkie Enterpris…
Walkie Enterprises reported sales revenue totaling $1,120,000, $1,340,000, and $1,675,000 in the years, 2014, 2015, and 2016, respectively.
Performing horizontal analysis, what is the percentage change for 2016?
(Solved):Q: Warren Buffett’s…
Warren Buffett’s Berkshire Hathaway Com-
pany went public in 1965. The public offering price
was $18 per share. The stock was trading at $190,500
on July 1, 2014, and the market value of the firm was
$304.8 billion.
(a) What is the firm’s average annual compound
growth rate over last 49 years?
(b) If Mr. Buffett’s company continues to grow at
the historical growth rate, what will be his com-
pany’s total market value when he reaches the
age of 100? (Buffett celebrated his 83th birthday
in 2014.)
(Solved):Q: The OK Company, …
(Solved):Q: Cash Payback Per…
Cash Payback Period, Net Present Value Method, and Analysis
Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows:
Year | Plant Expansion | Retail Store Expansion | ||
1 | $162,000 | $135,000 | ||
2 | 132,000 | 159,000 | ||
3 | 114,000 | 109,000 | ||
4 | 103,000 | 76,000 | ||
5 | 33,000 | 65,000 | ||
Total | $544,000 | $544,000 |
Each project requires an investment of $294,000. A rate of 10% has been selected for the net present value analysis.
Present Value of $1 at Compound Interest | |||||
Year | 6% | 10% | 12% | 15% | 20% |
1 | 0.943 | 0.909 | 0.893 | 0.870 | 0.833 |
2 | 0.890 | 0.826 | 0.797 | 0.756 | 0.694 |
3 | 0.840 | 0.751 | 0.712 | 0.658 | 0.579 |
4 | 0.792 | 0.683 | 0.636 | 0.572 | 0.482 |
5 | 0.747 | 0.621 | 0.567 | 0.497 | 0.402 |
6 | 0.705 | 0.564 | 0.507 | 0.432 | 0.335 |
7 | 0.665 | 0.513 | 0.452 | 0.376 | 0.279 |
8 | 0.627 | 0.467 | 0.404 | 0.327 | 0.233 |
9 | 0.592 | 0.424 | 0.361 | 0.284 | 0.194 |
10 | 0.558 | 0.386 | 0.322 | 0.247 | 0.162 |
Required:
1a. Compute the cash payback period for each project.
Cash Payback Period | |
Plant Expansion | |
Retail Store Expansion |
1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar.
Plant Expansion | Retail Store Expansion | |
Present value of net cash flow total | $fill in the blank 3 | $fill in the blank 4 |
Less amount to be invested | $fill in the blank 5 | $fill in the blank 6 |
Net present value | $fill in the blank 7 | $fill in the blank 8 |
2. Because of the timing of the receipt of the net cash flows, the offers a higher