User Account

All Pages

A company is trying to decide which of two new product

Assignment Help Accounting Basics
Reference no: EM13480703

A company is trying to decide which of two new product lines to introduce in the coming year. The company requires a 12% return on investment. The predicted revenue and cost data for each product line follows:

                                                            

Product a Product B
Unit sales 25,000 20,000
Unit sales price 30 30



Direct materials 15,000 8,000
Direct labor 120,000 80,000
Other cash expenses 30,000 25,000



New equipment costs 2,500,000 1,500,000
Estimated useful life (no salvage) 5 years 5 years

The company has a 30% tax rate and it uses the straight-line depreciation method. The present value of an annuity of 1 for 5 years at 12% is 3.6048. Compute the net present value for each piece of equipment under each of the two product lines. Which, if either of these two investments is acceptable?

Reference no: EM13480703

Questions Cloud

To acquire land and building the company paid 83600 cash : spitfire company was incorporated on january 2 2015 but was unable to begin manufacturing activities until july 1 2015
An estimate of the demand function for household furniture : an estimate of the demand function for household furniture produced the folloing results f 0.0036y1.08rr0.16p-0.48
Wrr corporation just paid a dividend of 150 per share d0 : warr corporation just paid a dividend of 1.50 per share d0 1.50. is projected to increase 5 annually over the next 3
What are auditing procedures what are some basic objectives : what are auditing procedures? what are some basic objectives of a financial statement
A company is trying to decide which of two new product : a company is trying to decide which of two new product lines to introduce in the coming year. the company requires a 12
The following information concerns production in the baking : the following information concerns production in the baking department for may. all direct materials are placed in
Pease fix everything grammar spelling using wrong words : please fix everything grammar spelling using wrong words coma etc... and take rid of i we he any thing like that
1 discuss the pros and cons of fixed exchange rate systems : 1. discuss the pros and cons of fixed exchange rate systems and flexible exchange rate systems.2. low-income nations
The balance in the account work in process-filling was as : the balance in the account work in process-filling was as follows on december 1 2012 work in process-filling department

Reviews

Write a Review

Accounting Basics Questions & Answers

  Howells correct ending inventory balance

What is Howell's correct ending inventory balance at December 31, 2010?

  Write a one half page report to a local not for profit

Both the budget process and budgets themselves can impact management actions, both positively and negatively. For instance, a common practice among non-profit organizations and government agencies is for management to spend any amounts remaining i..

  Prepare journal entries to record the transactions

Each fund must account for interfund activity as if it were a separate accounting entity.

  What is the ethical dilemma in this situation

Heidi Hart, the vice president of financial operations for Castle Candy Manufacturing Company and the controller, Linda Brown, are reviewing the financial statements for the prior two years of 2003 and 2004.

  Record the journal entries for the transactions

January 5, 2008 received a charter granting the right to issue 5,000 shares of $100 par value 8% cumulative, non-participating preferred stock and 50,000 shares of $5 par value common stock. Record the journal entries for the transactions listed a..

  Lane construction ltd is considering the acquisition of a

sensitivity analysis using excellane construction ltd. is considering the acquisition of a new eighteen wheeler.-the

  What is the acquisition cost of asset

What is the acquisition cost of each asset? Prepare a journal entry to record the acquisition. Danny plans to depreciate the operating assets on a straight-line basis for 20 years. Determine the amount of depreciation expense for 2010 on these newl..

  Expected present value of the cleanup provision

If you assume that these estimates are derived from best estimates of likely outcomes and the risk-free rate is 5%, the expected present value of the cleanup provision is what ??

  Overapplication of overhead for the period

Kimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:

  Seneca foods is a regional producer of low-priced

seneca foods is a regional producer of low-priced private-label snack foods. seneca contracts with local supermarkets

  What is the concept of current rate method of translation

What is the concept of current rate method of translation and temporal method of translation? How does balance sheet exposure differ under these two methods and the 2010 financial statement of Child Co.

  What sort of ongoing training should take place

What are some of the most common costs incurred associated with an audit engagement? Which costs could be better controlled? Why?

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