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Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot. The building and equipment are estimated to cost $1,100,000 and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Munster's required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:Revenue $450,000Less:Material cost $ 60,000Labor 100,000Depreciation 110,000Other 10,000 280,000Income before taxes 170,000Taxes at 40% 68,000Net income $102,000(a) Determine the net present value of the investment in the service center. Should Munster invest in the service center?
(b) Calculate the internal rate of return of the investment to the nearest A??1 percent.
(c) Calculate the payback period of the investment.
(d) Calculate the accounting rate of return.
The ending WIP inventory on May 31 consisted of 10,000 units. These latter units were 100% complete with respect to materials and 80% complete with respect to conversion. Costs added during the month were $330,000 for materials and $503,750 for co..
staffing company purchased the net assets i.e. assets minus liabilities of time management inc. for 390000. time
O'Bria Service Company purchased a copier on January 1, 2012, for $17,000 and paid an additional $200 for delivery charges. The copier was estimated to have a life of four years or 800,000 copies.
Journalize the entries to record the liquidation outlined below,using Assets as the account title for the non cash assets and Liabilities as the account title for all creditors' claims.
The finished goods inventory on hand at the end of each month must be equal to 5,000 units plus 25 percent of the next month's sales. The finished goods inventory on June 30 is budgeted to be 13,750 units.
Lake Coffee Company reported net income of $54,000 and net sales totals $800,000. The company's asset turnover ratio is 4.5 times. How much was the company's return on assets?
In the United States, about one in every four companies uses variable costing for internal reporting purposes. These companies must make adjustments to these reports for external-reporting purposes. Explain.
from the e-activity predict the effects that changes in one industry could have on modifying and updating a system of
The management of Eckel Corp. is considering the effects of various inventory costing methods on its financial statements and its income tax expense. Assuming that the price the company pays for inventory is increasing, which method will:
April--55K May--45K June--65K Production: 65K 55K 55K Cash-related production cost are budgeted at 7 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling..
Which of the following is recorded under Long Term Liabilities section of the Balance Sheet?
There are no price, efficiency, or spending variances, and any production-volume variance is directly written off to cost of goods in the quarter in which it occurs.
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