Answer:
Annual equivalent cost of the investment = $30,603.43 per annum
Explanation:
<em>Equivalent Annual cost is the Present Value of the total cost over the investment period divided by the appropriate annuity factor.</em>
<em>Step 1 </em>
<em>PV of cash flows</em>
PV of first cost = 150,000
<em>PV of annual maintenance cost of $17,500</em>
= 17,500× (1-(1+0.08)^(-30))/0.08
= 197,011.21
<em>PV of salvage value</em>
$25,000 × (1+0.08)^(-30)
= 2,484.43
<em>PV of net total cost </em>
= 197,011.21 +150,000 - 2,484.43
= 344,526.78
Step 2
<em>Determine the annuity factor for 30 years at 8%</em>
(1-(1+0.08)^(-30))/0.08
=11.2577
Step 3
<em>Equivalent annual cost</em>
= 344,526.78 / 11.2577
<em> =$30,603.43</em>
Annual equivalent cost of the investment = $30,603.43 per annum
Answer:
The answer is True.
Explanation:
The center of gravity method is a concept under <em>Operations Management</em> as it relates to facilities distribution such as warehouses or fulfillment centers.
Center of Gravity Strategy/Method is defined as a concept that seeks to calculate geographic coordinates for a potential single new facility that will minimize costs. Under this approach the main factors considered are:
- Cost of Shipping
- Markets
- Volume of goods shipped
Operations managers prefer to use this approach in siting the location of their facilities because:
- It minimizes cost.
- It is simple to compute
- It takes in to consideration existing facilities
How to use the Center of Gravity Method
Step 1:
- Place existing facility(ies) such warehouse, fulfillment center, and distribution center locations in a coordinate grid.
- situate the grid on an ordinary map.
- The distances between the facilities must be noted.
Step 2:
Then, using the equations below,
Fx= ∑ dix Vi/ ∑ Vi
Fy= ∑ diy Vi/ ∑ Vi
Proceed to calculate the X and Y coordinates using these equations where Fx is the X (horizontal axis) coordinate for the new facility, and
Fy is the Y (vertical axis) coordinate for the new facility, dix is the X coordinate of the current location, diy is the Y coordinate of the existing location, and Vi is the volume of goods moved to or from the <em>i</em>th location.
Step 3:
After you have obtained the X and Y coordinates place that location on the map.
This approach allows for point of departure – or, literally, a starting point of where (from the perspective of longitude and latitude) you options are for where to grow your fulfillment or logistics network.
Cheers!
Answer: $27,000
Explanation:
Even though for GAAP reasons, revenue is to be recognized only when earned as per the Accrual principle of accounting, this is not so for the calculation of taxable income.
Taxable income is to be calculated on cash basis which means that taxes are to be paid on revenue when the revenue is received in cash and not when it is earned.
As Ral Corp. received the money in 2020, they are to include the entire amount of $27,000 in their 2020 taxable income for rent revenue.
Answer:
The right approach is Option d (Sales commissions).
Explanation:
- Sales commission seems to be an expense for the time that is not reflected throughout inventory commodity prices. That would be the amount that could be received by a sales agent as well as a sales representative including its price of a property.
- The cost of products generated, credit card payments, postage charges the sales commission that you will allocate to sales workers are including variable costs.
Some other three choices are not associated with the case in question. So, option d seems to be the right choice.
