Business of cleaning bottles for large soft drink makers

Assignment Help Financial Management

Reference no: EM131611899

A small company XYZ Corporation is in the business of cleaning bottles for large soft drink makers. It presently owns a bottle-cleaning machine that operates for 5,000 hours per year at the rate of 50 bottles being cleaned per hour. XYZ charges P0.10 per cleaned bottle. The machine may be renovated to increase its output by an additional 20 cleaned bottles per hour, with no increase in its current operating cost which amounts to P10,000 annually. The renovation will cost P50,000 (as financed by bonds, P10,000; and retained earnings, P440,000) will extend the machine’s life to 5 years, and will result to zero salvage value at the end of that time. Is the renovation acceptable? Explicit cost for bonds is 15% while for retained earnings is 20%.

Reference no: EM131611899

Questions Cloud

Define the authors properly when using paraphrasing : the authors properly when using paraphrasing, short and long quoting. Any suggestions, notes or changes would be greatly appreciated too

How goal orientation heuristics applies to security : Explain in few sentences how each of these heuristics applies to security:Goal orientation (people want to pursue some task which isn't security)

Intervention or obstruction : When traveling on a Greyhound bus, without intervention or obstruction, it is important to determine the unit travel time.

Describe the meaning of marginal cost : In your own words, describe the meaning of marginal cost.

Business of cleaning bottles for large soft drink makers : A small company XYZ Corporation is in the business of cleaning bottles for large soft drink makers.

Create an ERD that represents the entities and attributes : Create an ERD that represents the entities, attributes, the relationships between entities, and the cardinality and optionality of each relationship

Big data and its business impacts : Select a (Only One) topic from the following list on which you would like to conduct an in-depth investigation:Information systems infrastructure.

Calculate total surplus : The figure shows the competitive market for cellphones. Shade in the consumer surplus and label it.

Explain the aspects of expansionary and contractionary : Explain the aspects of expansionary and contractionary fiscal policy. During which phases of the business cycle would each be appropriate?

User Account

All Pages