User Account

All Pages

Straight-line method

Assignment Help Managerial Accounting
Reference no: EM13110995

There is a company called Walmart, and it deals with machining work that is conventional. A variety of machines are used within the company, and these machines are frequently restored and changed.

George Bush is the manager of this factory, and he has given permission to acquire an automated machine from Machine Ltd. at a price of $2,000,000. Recently, the new automated machine was set up. It is believed that this new machine will last for 10 years and this new machine will incur operating costs of $700,000 (on a yearly basis). By the end of the 10 years, the machine will be useless.

George Bush's salary is $75,000 and he also obtains ½ of 1% of the corporate net income as his yearly bonus. Brad thinks he will stay with Walmart for an additional 2 years. Afterwards, he believes that by moving to a different company he will obtain a hefty salary increase and a promotion.

Super Machine Ltd. (another company) is offering a new machine. This machine executes the same jobs as the new machine from Machine Ltd. George Bush has his reservations about this new growth. The machine at Super Machine Ltd. costs $2,500,000 and has the capability of lasting for 10 years. The yearly operating costs are $300,000 and after 10 years the machine will have a nil salvage value. It has caused Walmart's machine as outdated and the net of salvage, its present amount has gone down to $500,000.

Based on the following questions, ignore income taxes and make the assumption that the company's compulsory return is 14%. In order to calculate the depreciation, this company uses the straight-line method.

a)     From the company's view point, what is the best conclusion?

b)     What do you think is George Bush's desired conclusion? Make sure to include the computations of income.

c)      By incorporating short-run financial methods of accomplishment as incentives for rewards, what do you think would be the motivation difficulties?

d)     How can the discrepancies in parts (a) and (b), and the motivation difficulties in part (c) be diminished?

Reference no: EM13110995

Questions Cloud

Which structure is found in all prokaryotic cells : Which structure is found in ALL prokaryotic cells.
Hypothesis testing business applications : A major issue facing many states is whether to legalize casino gambling. Suppose the govenor of one state believes that more than 55% of the state's registered voters would favor some form of legal casino gambling.
Communication based question : Communication is a two-way process. Communication is a series of loops. A message must be sent and the message must be received.
Explain how does diversity affect a group performance : Explain how does diversity affect a group's performance? Illustrate what is the possible short- and long-term effectiveness of diverse groups?
Straight-line method : Based on the following questions, ignore income taxes and make the assumption that the company's compulsory return is 14%. In order to calculate the depreciation, this company uses the straight-line method.
Compute mean and standard deviation by binomial distribution : Compute the mean and standard deviation by hand for the minitab created binomial distribution with probability of a success being 1/2.
Description of statistics-test statistic : Downtown Fish Company believes that it has a market share of 25%. They survey n = 100 fish owners and ask whether or not Downtown fish is their regular brand of Fish food, of which 23 people say yes.
Convert the data from your chosen source into an index : Convert the data from your chosen source into an index. Use the time series data from your index to forecast inventory for next year.
Compute the concentrations of all species : Compute the concentrations of all species in a 0.900 M sodium sulfite solution. If it is given that the ionization constants for H2SO3 are Ka1=1.4x10^-2 and Ka2=6.3x10^-8.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  How to charge costs for defending patents

Wriglee, Inc. went to court this year and successfully defended its patent from infringement by the competitor. The cost of this defense must be charged to:

  Management and leadership-defining relationship

What are the roles of individuals in the above scenarios? Are they managers, leaders, or both? What distinguishes management from the leadership and managers from leaders? The nature of relationship between leadership and management remains a top..

  Tax bases-budget financing-budget deficits

Contrast the 3 major classes of tax bases, also addressing economic bases. Examine various methods of government financing in their budget, and give a synthesis of the strengths and weaknesses of these methods, as well as their long term effects.

  Estimating opportunity cost

Assume that Dr. Behr has definitely decided to take every other Saturday off. She loves to repair her sports car by doing the work herself. If she works on her car during half a Saturday when she otherwise would nott see patients, what is her oppo..

  Calculate fixed cost-variable cost

Calculate the unknowns for the following independent situations. All given activity levels are within the relevant range.

  Budget line for consumer-using demand curve and utility

Given the following information, Describe the budget line for consumer. Be sure to label the axis and give a number for vertical and horizontal intercepts. Slope? Meaning?

  Changes in cash conversion cycle

Bello Corp. has annual sales of $50,735,000, an average inventory level of $15,012,000, and average accounts receivable of $10,008,000. The company makes all purchases on credit and has always paid on the 30th day.

  Fixed overhead standard cost variances

Compute the predetermined fixed overhead application rate that would be used in March. Compute the number of machine hours that would be allowed for actual March production. Compute the fixed overhead applied to work in process during March.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Us budget deficits foreign financed

Describe the relationship between the trade deficit and financing of the U.S. budget deficit by foreign countries. Is this the potentially dangerous situation?

  Cost considerations-operating effectiveness

Auditors should decide, based upon cost considerations, whether to test the design effectiveness or operating effectiveness of controls. Inquiry alone provides sufficient evidence to support operating effectiveness of a control.

  Advises the payroll department

The payroll bank account is reconciled by the chief accountant, who also prepares the several quarterly and annual tax reports.

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