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Valentin [98]
2 years ago
10

EDP is trying to decide between two different conveyor belt systems. System A costs $438,000, has a six-year life, and requires

$83,000 in pretax annual operating costs. System B costs $369,000, has a five-year life, and requires $92,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have a zero salvage value. Whichever system is chosen, it will not be replaced when it wears out. The tax rate is 23 percent and the discount rate is 14.2 percent. Which system should the firm choose and why?
Business
1 answer:
Liula [17]2 years ago
6 0

The firm should choose system A because it has a six-year life and a lesser annual operating cost.                                                                  

<u>Explanation</u>:

  • Even though system A costs $438,000 the quality of the system is good. The quality of system A has a six-year life. So the quality is pretty good. It has an $83,000 tax annual operating cost.
  • System B costs $369,000 . Compared to the cost of system A, system B is low. But it has a $92,000 tax annual operating cost. This tax is higher than A.
  • System A has a higher life compared to system B. So the firm should choose system A.                

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Which of the following would shift the supply curve for roses to the right? a. Valentine’s Day is approaching, and everyone want
tia_tia [17]

Answer:

b. There is a fall in the wages paid to workers that grow roses.

Explanation:

A shift to the right in the supply curve means that the supply of roses increased the quantity of roses at the same price. This is only possible is a change in the cost structured improved the capacity of production of roses at the same use of resources. With a fall in salaries of workers is possible to hire more workers and increase the offer of total roses at a same level of previous cost

7 0
2 years ago
Walthaus Corporation's standard cost sheet is as follows Direct material Direct labor Variable overhead Fixed overhead 4 feet at
nirvana33 [79]

Answer:

1. U. None of these

2. Variable overhead price variance = $2,000 F

Variable overhead efficiency variance = $4,000 U

Explanation:

Please see attachment.

4 0
2 years ago
You must estimate the intrinsic value of Noe Technologies’ stock. The end-of-year free cash flow (FCF1) is expected to be $27.50
emmasim [6.3K]

Answer:

= $52.78 per share

Explanation:

<em>The value of a business can be determined using the free cash flow model. According to this model, the value of a firm is is the present value of its free cash flow discounted at the weigthed average cost of capital (WACC.)</em>

<em>The value of equity is the value of firm less value of other instruments (e.g debt and preferred stocks)</em>

<em>Value of equity = Value of the entire firm - Value of debt </em>

We can work out the the value per share using the steps below:

<em>Step 1</em>

<em>Calculate the total value of the firm</em>

Value of firm =  27.50/(0.1-0.07)

 = $916.66 million

<em>Step 2</em>

<em>Calculate the value of equity</em>

<em>Value of equity = Value of the entire firm - Value of debt</em>

= $916.66 million - $125.0 million

=791.666 million

<em>Step 3</em>

<em>Calculate the value per share</em>

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3 0
2 years ago
A company works 320 days per year and has an annual demand of 2080 units of product desires to set an reorder point that will co
GenaCL600 [577]

Answer:

D. Re-order point = 26 days

Explanation:

Given,

Annual Demand, D = 2,080 units

Number of working days = 320 days

Lead time = 4 days

We know,

Re-order point = (Annual demand/Number of working days)*Lead Time

Re-order point = (Annual demand/Number of working days)*Lead Time

Re-order point = (2,080/320)*4

Re-order point = (6.5*4)

Re-order point = 26 days

Therefore, the answer choice is D.

As there is no maximum and average lead time and no replenishment stock, I exclude the safety stock from the re-order point calculation.

3 0
3 years ago
Paris operates a talent agency as a sole proprietorship, and this year she incurred the following expenses in operating her tale
Marrrta [24]

Answer:

The total deductible amount of these expenditures is $450.

Explanation:

Half of any cost of meals and entertainment to which business discussion is associated and appropriate records kept is allowed to be deducted.

Since it is only tickets to the opera with a client following a business meeting that meet this condition, 50% of the total amount of $900 which is $450 is deductible.

3 0
2 years ago
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