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.
Answer:
$128,787.07
Explanation:
Initial investment = $2.32 million = $2,320,000
Depreciation = investment ÷ Useful life
= $2,320,000 ÷ 3
= $773,333.33
Operating cash flows from year 1 to year 3
= [ ( Sales - Costs - Depreciation ) × (1 - tax) ] + Depreciation
= [ ( $1,735,000 - $650,000 - $773,333.33 ) × (1 - 0.21) ] + $773,333.33
= 1019549.99 ≈ 1,019,550
Thus,
NPV = Present value of cash inflows - Present value of cash outflows
Also,
Initial investment = 
- 2,320,000
or
NPV = $128,787.07
Answer:
b. The balance of the Allowance for Doubtful Accounts will be $22,000 after adjustment.
Explanation:
If credit losses are estimated at 1% of credit sales than balance of allowance for doubtful account after adjustment will be = $6,000 + $1,600,000 * 1%
= $6,000 + $16,000
= $22,000
The correct answer to this open question is the following.
You forgot to include the options for this question. However, we can answer the following.
This scenario best illustrates forward integration.
This is a case of forward integration because BlockWood Inc., which was facing similar difficulties with other buyers too, eventually stopped supplying raw materials and took to manufacturing furniture instead. SO they decided to fabricate their own furniture.
Companies make this decision as a process of vertical integration to expand and grow their business. In this case to produce and control their own products, eliminating the retailer that had decided to pay less money for the raw materials.
So now, Blockwood Inc. has the challenge to design and sell the products it is fabricating.
Answer:
The correct answer is intangible.
Explanation:
An intangible asset is a product or service that should not be physically delivered, but that provide us with a service. An intangible product, also called service, should not necessarily revolve around a physical product; There are also so-called pure services, that is, whoever buys a service is not buying something physical; Who buys or hires a service is paying for a transformation process.
