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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 $450,000 Less: Material cost $ 60,000 Labor 100,000 Depreciation 110,000 Other 10,000 280,000 Income before taxes 170,000 Taxes at 40% 68,000 Net 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 ½ percent. (c) Calculate the payback period of the investment. (d) Calculate the accounting rate of return.
the litton company has established standards as follows direct material3 pounds per unit 4 per pound 12 per unit
Compute the profit margin ratio and gross profit rate. Caltor Company's assets at the beginning of the year were $770,000 ,and were $830,000 at the end of the year. To qualify for full credit, you must state the formula you are using, show your co..
Determine the total estimated uncollectibles. Prepare the adjusting entry at March 31, 2007, to record bad debts expense. Discuss the implications of the changes in the aging schedule from 2006 to 2007
paint more llc has organized a new division to manufacture and sell specialty paint. the divisions monthly costs are
The heating division of ITA International produces a heating element that it sells to its customers for $42 per unit. Its variable cost per unit is $19, and its fixed cost per unit is $10. What is the minimum transfer price that the heating divisio..
1. prepare an income statement for the company using variable costing.2. prepare an income statement for the company
When confirming accounts payable, emphasis should be put on what kind of accounts? Which of the following situations indicates a potential material weakness in internal control over acquisition and expenditure?
emily company has sales on account and sales for cash. specifically 60 of its sales are on account and 40 are for cash.
What is the difference between the auditor's approach in verifying sales returns and allowances and sales? Why is there a difference?
machinery purchased for 60000 by tom brady co. in 2003 was originally estimated to have a life of 8 years with a
A single product in one department and uses a process costing system. At the start of May, there were 10,000 units in process that were 100 percent complete with respect to direct material and 60 percent complete with respect to conversion costs (..
Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2010 and 2011. Assume taxable income was $980,000 in 2011.
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