Answer:
a. $10,003.
Explanation:
The terms of 2/10, n/45 means that there is a 2% discount if the payment is made within 10 days of the sales date and rhe net credit period is 45 days.
Calculate total invoice value
Total Invoice value = Merchandise value + Freight Charges = $10,700 + $850 = $11,550
As the payment is made on June 24 within the discount period, the discount will be availed
Discount = ( Purchases made - Returns ) x 2% = ( $10,700 - $1,360 ) x 2% = $186.80 = $187
Now the Amount paid
Amount Paid = Invoice value - Return - Discount avaialed = $11,550 - $1360 - 187 = $10,003
Which answer best illustrates what trade-offs are?
PLS HELP!!!!
1. Based on the profit-loss statement, does Rings and Things have a positive or negative cash flow?
Why?
Based on the profit loss statement rings and things has a negative cash flow because they're not
operating activities is not breaking even and they are losing money.
2. Based on the profit-loss statement, name two ways Janet and Omar can improve their cash flow.
3. Omar and Janet decide to revise their budget for Rings and Things. What suggestions about labor
costs would you make, if the goal is to improve the business's cash flow?
4. Omar and Janet are also trying to forecast what their federal and state income taxes will at the end
of the year. If Rings and Things had a negative cash flow of $150.00 per month from January
through April, but a positive cash flow of $1,000.00 per month (after expenses) from May through
December, on what dollar amount will they determine their income taxes? What expenses could be
used for tax deductions?
Answer:
1. They have a negative cash flow.
Because their net operating activities is not breaking even, in other words, they are losing money.
2.Omar and Janet should reduce the budget for labor
The labor budget for Janet and Omar is $1000, approximately 57 percent of their total cost. Labor costs are 62 percent of the total income earned. This indicates that Janet and Omar's labor budget is on the upper side.
As a rule of thumb, labor should range between 25 to 35 percent of the totals costs. Another school of thought suggests that labor should not exceed 30 percent of total revenue. For Janet and Omar to be profitable, they must revise their budget downwards. The ideal labor cost should be below $400.
3. Review labor costs downwards.
4. They will determine their income taxes based on their positive cash flow of $1,000.00 per month. This is because this cash flow spans across more months than their negative cash flow of -$150.00 per month. Expenses that could be used for their tax deductions is sales tax.
Answer:They have a negative cash flow.
Because their net operating activities is not breaking even, in other words, they are losing money
Explanation:
hope this helped!
8. Primary data is high cost and time consuming. (1 Point) O True O False
Answer:
True
Explanation:
Primary data is the information collected for the first time by a researcher. It is precisely for a particular study. The researcher uses interviews, surveys, or experiments to collect the data. It means the researcher or his representative has to go to the field to gather the required information.
Fieldwork is time-consuming and costly. Money is needed to meet logistics expenses and the cost of data collecting techniques such as questionnaires and recording devices. The researcher may need to engage assistants who have to be paid.
Question 9
A wage is a specific amount of money paid per
Answer:
a wage is a specific amount of money paid per business day
what is the starting salary of an entry level librarian? it could hour wage or yearly.
Answer:
$46k–84kper year
Explanation:
Answer:
Which city, though?
Explanation:
Highest Paying Cities for Entry Level Librarian Jobs.
City Richmond, CA
Annual Salary $46,419
Monthly Pay $3,868
Weekly Pay $893
Hourly Wage $22.32
Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow.
Repairs HR IT M1 M2
Repairs _____ 0% 0% 40% 60%
HR 10% _____ 20% 35% 35%
IT 0% 10% ____ 20% 70%
The direct costs of the service departments in the previous period were $36,000 for Repairs, $55,600 for HR, and $81,000 for IT.
Required:
Use the step method to allocate the service department costs to the production departments. Allocate HR costs first, followed by IT, and then Repairs
Answer:
Bens Corporation
Allocation of Service Departments' Direct Costs:
Repairs HR IT M1 M2 Total
Direct costs $36,000 $55,600 $81,000 $172,600
Step allocation:
HR direct costs 5,560 -55,600 11,120 19,460 19,460 0
IT costs 0 0 -92,120 20,471 71,649 0
Repairs costs -41,560 0 0 16,624 24,936 0
Total costs allocated 0 0 0 $56,555 $116,045 $172,600
Explanation:
a) Data and Calculations:
Usage data:
Repairs HR IT M1 M2
Repairs 0% 0% 40% 60%
HR 10% __ 20% 35% 35%
IT 0% 10% __ 20% 70%
HR Costs = $55,600:
Repairs = $5,560 ($55,600 * 10%)
IT = $11,120 ($55,600 * 20%)
M1 = $19,460 ($55,600 * 35%)
M2 = $19,460 ($55,600 * 35%)
IT costs = $92,120:
Repairs = $0 ($92,120 * 0%)
M1 = $20,471 ($92,120 * 20/90)
m2 = $71,649 ($92,120 * 70/90)
Repair costs = $41,560:
M1 = $16,624 ($41,560 * 40%)
M2 = $24,936 ($41,560 * 60%)
Answer:
HR allocation:
$3,960 = 0.10 × $39,600
$7,920 = 0.20 × $39,600
$13,860 = 0.35 × $39,600
$13,860 = 0.35 × $39,600
IT allocation:
$52,920 cost of IT is $45,000 (direct cost) + $7,920 (allocated from HR)
$11,760 = 0.2 × $52,920
(0.2 + 0.7)
$41,160 = 0.7 × $52,920
(0.2 + 0.7)
Repairs allocation:
$23,960 cost of Repair is $20,000 (direct cost) + $3,960 (allocated from HR)
$9,584 = 0.40 × $23,960
$14,376 = 0.60 × $23,960
Missy must take out student loans in order to attend college. She expects to earn an average annual salary upon graduation. She figures that she will need to work for ten years before her assets will outweigh her liabilities. Until that ten year mark, what term best defines her financial situation?
A. Asset
B. Deficit net worth
C. Liability
D. Material Wealth
Answer:
sorry meant d
Explanation:
Hernando lives in a county where everyone pays the same amount of taxes no matter their income. Which type of tax system is Her
MOST likely using?
Answer: Proportional Tax System
Explanation:
Hernando's country is using proportional tax system or Flat tax system.
What is proportional tax system?Everyone pays the same tax rate under proportional taxes, regardless of income. Since everyone pays the same rate, regardless of their income, sales taxes are considered proportional regressive taxes.
No matter their wealth or income, everyone pays the same amount of tax under a proportionate or flat tax system. This approach aims to achieve parity between the average tax rate paid and the marginal tax rate.
Because there is no tax penalty for earning more money, proponents of proportional taxation contend that they promote the economy by motivating people to work harder. Additionally, they think that firms would be more willing to invest and spend money under a flat tax structure, boosting the economy.
To learn more about proportional tax system
https://brainly.com/question/15399711
#SPJ2
Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the journal entry necessary to record the repurchase of stock on June 30?A. Debit Common Stock $2,300; credit Cash $2,300.
B. Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300.
C. Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300.
D. Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000.
E. Debit Cash $2,300; credit Treasury Stock $2,300.
Answer:
When shares are repurchased, they are recorded at the cost price in the books which means that they will be recorded at:
= 100 * 40
= $4,000
Cash will then be credited because assets are credited when they reduce.
Treasury stock will be debited to show that Equity is reducing.
Date Account Title Debit Credit
June, 30 Treasury Stock $4,000
Cash $4,000
Compare and contrast an operating budget with cash flow budget.
Answer:
hope this helps
Explanation:
An operating budget tends to have a longer time frame than a cash budget, although the period covered by an operating budget can be covered by a series of cash budgets. Operating budgets are tied to strategic, long-term plans, expressing a company's priorities based on its overall mission and direction
Which of the following policies is most likely to encourage innovation, higher quality goods, and lower prices?
I. Encouraging public-private partnerships
II. Passing government regulations to reduce business failures and protect consumers
III. Reducing barriers that limit entry of firms into new and existing markets
a. II and III
b. III only
c. I only
d. I and II
Reducing barriers that limit entry of firms into new and existing markets.
Option b is correct.
Public-private partnerships: what are they?Public-private partnerships graphic
Public-private partnerships (PPPs) bring together the public and private sectors to execute projects or services that are typically handled by the public sector.
What governs PPP's fundamental tenets?Two key tenets form the foundation of PPP: In the project, both parties put money. both in terms of resources (budget for labour and supplies) and knowledge-related resources (knowledge, networks). Both societal and frequently commercial goals are furthered by the parties.
TO know more about PPP visit:
https://brainly.com/question/29793109
#SPJ4
What are 2 key benefits of budgeting?
Budgeting allows for effective financial management, empowering individuals and organizations to control their finances, plan for the future, achieve goals, and enhance long-term security.
Budgeting offers several key benefits for individuals, households, businesses, and organizations. Here are two key benefits of budgeting:
Financial Control and Planning: Budgeting provides a framework for financial control and planning.
By setting clear financial goals and allocating resources effectively, individuals and organizations can have better control over their income, expenses, and overall financial situation. Budgeting allows for proactive decision-making, as it helps identify areas of overspending or potential savings, enabling adjustments and course corrections as needed.
It helps in prioritizing expenses, reducing wasteful spending, and ensuring that financial resources are allocated in line with priorities and objectives.
Goal Achievement and Future Security: Budgeting plays a crucial role in goal achievement and future security. By setting specific financial goals, such as saving for a house, education, retirement, or business expansion, budgeting helps individuals and organizations allocate resources towards these goals systematically.
It provides a roadmap for saving and investing, ensuring progress towards long-term objectives. Budgeting also helps in managing debt effectively, reducing financial stress, and building a strong financial foundation for the future.
By establishing savings and emergency funds, budgeting provides a safety net, enhancing financial resilience in case of unexpected events or economic downturns.
For more question on financial visit:
https://brainly.com/question/1265337
#SPJ8
What basic business principle does the author of your reading material state that automakers ignored in recent years, leading to the need for an industry bailout?
A sustainable financial model that is adaptable to changing market conditions is what was ignored
The principle that was ignoredThe core concept that industry titans overlooked, eventually necessitating a bailout, was constructing and sustaining a pliable monetary ploy attuned to shifting market conditions.
Prior to the aid package, auto-manufacturers homed in on sales of high fuel-consumption SUVs and trucks which were appealing due to inexpensive gas costs combined with easily accessible credit.
The dismayingly tardy adaptation to changing patron likes for more fuel-thrifty and environment friendly motorsides - along with mounting rivalry from overseas powerhouses - drove automakers into a perilous condition, where they ultimately felt the blow of 2008’s global fiscal crunch, harshly diminshing productivity as well as profits.
Read more on business principles here:https://brainly.com/question/28072798
#SPJ1
If managerial work is characterized by variety, fragmen-tation, and brevity, how do managers perform basic management functions such as planning, which would seem to require reflection and analysis.
There are several management styles that depend on various elements such as the industrial domain, culture, etc. Managers are required to be effective at multitasking and wearing multiple hats at once.
What do you mean by the management functions?The process of organizing, directing, planning, and supervising the work of organizational members and managing organisational resources to achieve specific goals is referred to as management.
Nearly every action or procedure can be classified into one of four basic management functions:
Planning has a purpose.Functions of organization.Directing roles.functions of control.Therefore, there are several management styles that depend on various elements such as the industrial domain, culture, etc. Managers are required to be effective at multitasking and wearing multiple hats at once.
While some businesses would benefit from a more hands-on approach, others could choose a very high-level approach where managers merely serve as facilitators and only intervene when necessary.
To know more about the management functions, visit:
https://brainly.com/question/15351742
#SPJ1
56 Points & BRAINLIEST Which of the following can be created between two tables which share a common field?
O Field report
O Relationship
O Datasheet
O Connections
i think the third option but i think its wrong i am unsure and i dont want to say thhe wrong thing
Which feature is a point of differentiation between products and services
Answer:
Products are tangible, offered by the companies to the customers in exchange for money.
Services are the intangible economic product that is provided by a person on the other person’s demand. It is an activity carried out for someone else.
Explanation:
Planet Corporation acquired 90 percent of Saturn Company’s voting shares of stock in 20X1. During 20X4, Planet purchased 52,000 Playday doghouses for $28 each and sold 37,000 of them to Saturn for $34 each. Saturn sold all of the doghouses to retail establishments prior to December 31, 20X4, for $49 each. Both companies use perpetual inventory systems.
Required:
Prepare all journal entries Planet recorded for the purchase of inventory and resale to Saturn Company in 20X4.
Answer:
Purchase of Inventory by Planet (Parent)
Inventory $1,456,000 (debit)
Cash $1,456,000 (credit)
Sale of Inventory by Planet (Parent) to Subsidiary (Saturn)
Revenue $1,258,000 (debit)
Cost of Sales $1,258,000 (credit)
Sale to third Parties by Saturn
Cash $1,813,000 (debit)
Cost of Sales $1,036,000
Sales Revenue $1,813,000 (credit)
Inventory $1,036,000
Explanation:
Purchase of Inventory by Planet (Parent)
Inventory $1,456,000 (debit)
Cash $1,456,000 (credit)
Inventory : 52,000 × $28 = $1,456,000
Sale of Inventory by Planet (Parent)
Note : This is an Intragroup transaction and need to be eliminated
Revenue $1,258,000 (debit)
Cost of Sales $1,258,000 (credit)
Revenue : 37,000 × $34 = $1,258,000
Sale to third Parties by Saturn
Cash $1,813,000 (debit)
Cost of Sales $1,036,000
Sales Revenue $1,813,000 (credit)
Inventory $1,036,000
Sales Revenue = 37,000 × $49 = $1,813,000
Cost of Sales = 37,000 × $28 = $1,036,000
Marilyn wants to use a non-price competitive marketing strategy to gain more customers. Which of the following might she use?
lowering the cost of services
raising product prices
offering a promotion
underbidding competitors
Since Marilyn wants to use a non-price competitive marketing strategy to gain more customers, the option that she might use is option c: offering a promotion
What are non-price competition strategies?Non-price competition is a strategy that emphasizes on superior product quality, a unique selling proposition, a great location, and good service in place of cheaper pricing in order to draw clients and boost sales. It aids in brand differentiation and consumer acquisition. 29 Sept 2022
Note that a variety of strategies are used in marketing, including product differentiation, advertising, promotion, and distribution and as such, option C is correct.
Learn more about marketing strategy from
https://brainly.com/question/25640993
#SPJ4
Your friend Alice is a full-time college student, earned $4,000 working at the campus bookstore over two semesters last calendar year, and also got a part-time job as a cashier in February, earning $9,500. Alice knows that you have been learning about taxes in your personal finance lessons and asks you, “Do I need to file taxes this year? If I do, what is the process like?”
Single, under the age of 65 and not older or blind, you must file your taxes if: Unearned income was more than $1,050. Earned income was more than $12,000. Gross income was more than the larger of $1,050 or on earned income up to $11,650 plus $350.
Sorry, I can not answer the second part to the question sorry.
Recently, "de-dollarization" has become a hot topic of global discussion. Recently, a Chinese think tank published an article saying that the trend of global de-dollarization has become very clear, and many countries in the world are working hard to reduce their dependence on the US dollar. The main driving force for this trend is my country's weaponization of its currency through excessive sanctions.
De-dollarization, or the reduction of dependence on the US dollar in global financial transactions, has indeed gained attention in recent years. While it is true that some countries are actively working to diversify their currency holdings and reduce reliance on the US dollar, it is essential to consider multiple factors that contribute to this trend.
One of the factors that have led to discussions about de-dollarization is the use of economic sanctions by the United States. Economic sanctions can be a powerful tool for a country to exert pressure on another nation, but they can also have unintended consequences. When the US imposes sanctions, it often restricts access to the US financial system, which is heavily reliant on the US dollar. This has prompted some countries to explore alternative methods of conducting international trade and finance to mitigate the impact of sanctions.
China, as a rising economic power, has been at the forefront of efforts to promote de-dollarization. It has taken steps to internationalize its currency, the yuan (also known as the renminbi), and has established currency swap agreements with various countries to facilitate trade settlements in yuan. Additionally, China has been promoting the use of its currency in international transactions through initiatives like the Belt and Road Initiative, which aims to enhance trade connectivity and financial integration among participating countries.
While weaponization of the US dollar through sanctions is indeed a contributing factor to the de-dollarization trend, it is not the sole driver. Other factors include concerns about the long-term stability of the US dollar, efforts by countries to reduce vulnerability to currency fluctuations, and geopolitical considerations. Some countries view de-dollarization as a way to enhance their economic and financial sovereignty, diversify risk, and reduce exposure to potential US policy changes.
It is important to note that the process of de-dollarization is gradual and complex. The US dollar still remains the dominant global reserve currency and the primary currency for international trade. The global financial system has deep-rooted structures and networks that make a rapid shift away from the US dollar challenging. However, as various countries seek to reduce their dependence on the US dollar, we can expect ongoing discussions and actions related to de-dollarization in the global economic landscape.
\(\huge{\mathfrak{\colorbox{black}{\textcolor{lime}{I\:hope\:this\:helps\:!\:\:}}}}\)
♥️ \(\large{\textcolor{red}{\underline{\mathcal{SUMIT\:\:ROY\:\:(:\:\:}}}}\)
Company X has to launch a fast charging battery for UPS. In Pakistan due to increased load shedding of electricity the demands of UPS has increased, therefore the competition among UPS making companies has also increased.
How market education can help the company to compete in market and improve sales performance?
Market education can help the company to compete in the market and improve sales performance in order to understand and meet the needs, desires and profile of the potential consumer, segmenting the market, creating value and competitive advantages.
What is market education?It corresponds to the process of increasing strategic and tactical knowledge about the market in which a company will operate, in order to use research, tools and programs for market analysis, identification of its strengths and weaknesses and the external environment, in order to identify a need market and develop a value proposition.
Therefore, market education is an essential characteristic for all marketing professionals, which will help a company to be innovative, creative and strategically competitive, attracting and retaining customers through its products and services.
Find out more about marketing here:
https://brainly.com/question/25754149
#SPJ1
(0)
In an assault case, it is irrelevant:
1 whether there is any reasonable apprehension of imminent battery.
2 whether there is any intent or not.
3 whether the threatened contact actually occurs.
4 whether there is an apprehension of harmful contact.
In an assault case, it is irrelevant whether the threatened contact actually occurs. (3)
What matters is the reasonable apprehension of imminent battery, the intent, and the apprehension of harmful contact.
An assault occurs when a person intentionally causes another to reasonably apprehend imminent harmful or offensive contact. The focus is on the victim's apprehension rather than the actual contact.
For an assault, there must be a reasonable apprehension of imminent battery (option 1), which means the victim must believe they are about to be harmed. Intent (option 2) is also crucial, as the accused must have intended to cause the apprehension of harm.
Lastly, there should be an apprehension of harmful contact (option 4), which means the victim must be aware of the threat. If these elements are present, an assault can occur even without the threatened contact actually taking place (option 3).
To know more about apprehension click on below link:
https://brainly.com/question/11143173#
#SPJ11
On January 2, 2019, All Good Company purchased 6,000 shares of the stock of Big Bad Company, and DID NOT obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $19.00 per share, and represents a 10% ownership stake. Big Bad Company made $45,000 of net income in 2020, and paid dividends to All Good Company of $97,500 on December 15, 2020. On December 31, 2020, Big Bad Company's stock was trading on the open market for $14.50 per share at the end of the year. Use this information to determine the unrealized gain or loss on the investment that should be reported at year end by All Good Company. If it is a loss, enter as a negative number. Round to nearest whole number (no cents).
Therefore, All Good Company should report the investment's $155,000 book value at the end of the year.
An asset or item purchased with the intention of earning money or increasing in value is an investment. An asset's appreciation over time is referred to as appreciation. When a person purchases a product as an investment, the goal is not to use the product now but to use it to build wealth in the future.
Calculation to determine the investment's book value, which All Good Company should report at the end of the year: $60,000 x 6,000 x $10.00 per share $135,000 less than the following:
Ending investment balance of $155,000 (60,000+$135,000-$40,000) Dividend ($40,000).
To learn more about investment's here
https://brainly.com/question/15353704
#SPJ1
What is an example of the consideration of visual merchandising?
A.
online ads using negative space to emphasize text
B.
social media videos with contrasting, bright images
C.
sponsored search engine results being shown in bold
D.
kids’ cereal boxes shelved about four feet high
An example of the consideration of visual merchandising can be seen in the way that kids’ cereal boxes are shelved in grocery stores. This is an example of how visual merchandising can be used to create an emotional connection with customers and influence their purchasing decisions. The correct option is D.
Visual merchandising refers to the visual elements that are used to promote a product or service. This includes the design of the product packaging, displays, advertising, and other marketing materials. Visual merchandising is important because it can help to create a strong brand identity, increase customer engagement, and ultimately drive sales.
Other examples of visual merchandising might include online ads that use negative space to emphasize text, social media videos with contrasting, bright images, and sponsored search engine results that are shown in bold.
All of these strategies are designed to capture the attention of the customer and encourage them to take action, whether it's clicking on an ad or making a purchase in-store. By carefully considering the visual elements of their marketing strategy, businesses can create a powerful and effective message that resonates with their target audience. The correct option is D.
For more such questions on merchandising
https://brainly.com/question/30371466
#SPJ8
List four sources you can use to locate job leads
Take a notepad, and write down all the work that you can do that will pay you — this will be your skillset.
Pick out keywords from them. Say “writing" or “coding" “Agile" or “mathematics”. Highlight them in your profile.
Make a list of all the jobs you can do with your above skillset. This you can use the help of job portals. Now, look out for companies that hire for such jobs, and start your search.
While a personalized resume for every job is necessary, your generalized profile on professional networking sites such as LinkedIn or job portal sites such as Naukri needs to be updated accordingly.
Most important — tell everyone you know that you are actively seeking a job, and what type of job you want, along with your skill set. Post it on social media, job sites, etc; you will never know who will help you. People in jobs get notifications about opportunities quite a lot, and if you made it known that you are looking for one, they will let you know.
Keep searching. All my jobs, I got it because I never stopped searching. I search for openings, find the contact details of the company, get in touch with them, and most importantly, I keep on bugging them till I get a satisfactory response from them. For my current job, I called HR every day until they scheduled an interview.
Keep upskilling yourself. Education is never over with your college. There are so many skills that you should equip yourself with, and there are so many tutorials available online and offline for them, like Coursera, Udemy, EdX, etc. Utilize them, sometimes they have free content as well.
1) Social Network (online like Monster.com)
2) Employment agencies
3) Job Fairs
4) Unemployment office
The US Senate overwhelmingly passed the 2022 Defense Authorization Act. The $768 billion "Defense Authorization Act" not only exceeds the defense spending proposed by the Biden administration by $25 billion, but also increases the US defense budget by about 5% compared to last year.
The US Senate passed the 2022 Defense Authorization Act, a $768 billion bill that surpasses the Biden administration's defense spending proposal by $25 billion and represents a 5% increase in the US defense budget compared to the previous year.
1. The US Senate passed the 2022 Defense Authorization Act.
2. The Defense Authorization Act is a bill that determines the budget and expenditures for the US defense sector.
3. The total amount allocated for the Defense Authorization Act is $768 billion.
4. The defense spending proposed by the Biden administration was exceeded by $25 billion in this Act.
5. The Act represents a 5% increase in the US defense budget when compared to the previous year.
6. This increase in the defense budget indicates a commitment to strengthening the country's defense capabilities.
7. The Act was passed overwhelmingly, indicating strong support from the Senate.
8. The Defense Authorization Act is an essential piece of legislation that ensures the funding and resources necessary for the US military to carry out its operations effectively.
9. The Act covers various aspects of defense spending, including military personnel, equipment, research and development, and strategic initiatives.
10. By passing the Defense Authorization Act, the US Senate has demonstrated its commitment to national security and defense preparedness.
For more such questions on Defense Authorization Act, click on:
https://brainly.com/question/29225501
#SPJ8
Kabete limited is a one of the seed companies operating in Kenya. The company develops, produces, and
distributes high quality seeds that guarantee high performance for the farmers located in dry lands and
highlands part of the country. Last month, the company had a major breakthrough in the development of
a resistant and high quality seed of sorghum suitable for growing conditions of Kerio Valley where Kenya
Development Authority (KVDA) has commissioned irrigation schemes on thousands of hectares of
arable land. In order to process and deliver the seed, Kabete limited has the option either hiring a
processing plant from Smart Seed limited or acquiring it in order to meet the demand of the already
identified market. The following information for the two options has been availed by the capital
budgeting team.
OPTION ONE: HIRING PROCESSING PLANT
(i) Smart Seed limited will charge $ 250 per hour for a maximum of ten hours a day
(ii) The charges per hour beyond ten hour processing time is $280
(iii)Smart Limited estimates that inflation will go up each year by five per cent. As a result, annual
charges will be adjusted upwards to accommodate for inflation.
(iv)Kabete limited estimates that it requires 2,000 hours of the hired plant at most for 80 days a year.
OPTION TWO: SET UP THE PLANT
(i) Acquisition cost is estimated to be $1.5 Million
(ii) Preliminary expenses is estimated to be $ 0.2 Million
(iii)Excess capacity is anticipated which the company plans to rent out for eight hours a day for $ 280
per hour, 250 days in a year
(iv)Installation Costs estimated to be $ 75,000
(v) Initial amount of required of working capital estimated at $ 40,000
(vi)Maintenance cost per year is estimated at $ 30,000
(vii) Energy Consumption cost per year is estimated at $ 50,0000
(viii) Incremental overheads cost per year is estimated at $ 140,000
(ix)Financing costs per year estimated at $ 20,000
(x) Useful Life of the machine = five years
(xi)Estimated salvage value at the end year five is $ 20,000
(xii) No Depreciation charge in Year five
(xiii) Corporate tax rate = 30 %
(xiv) Risk adjusted cost of capital is estimated at 12 %
(xv) Depreciation rate is given 25 % on a reducing balance basis
(xvi) The plant can be rented out
Questions:
(a) What is the intuitive explanation of the hurdle rate of 12 %
(b) Compute total savings in hiring charges if the company sets up the plant
(c) Compute rental revenue from renting out the processing plant
(d) Using Discounted cash flow techniques of NPV and BC-R , compute the figure of merit and decision
criterion
Page 2 of 6
(a) The hurdle rate of 12% is the minimum rate of return that an investment project must earn to be considered viable.
b) Total savings in hiring charges if the company sets up the plant is $38,385,000.
c) Rental revenue from renting out the processing plant is $2,800,000.
d) The figure of merit can be computed using the discounted cash flow techniques of NPV and BC-R.
a) It represents the opportunity cost of investing in the project, which is the return that could be earned by investing in an alternative project with similar risk. Therefore, any investment project must be evaluated against this hurdle rate to determine if it is worth pursuing.
(b) Total savings in hiring charges if the company sets up the plant can be calculated as follows:
Total hours required = 2,000 hours x 80 days = 160,000 hours
Maximum hours per day = 10 hours
Total days required = 160,000 hours / 10 hours per day = 16,000 days
Hiring cost for 16,000 days = $250 x 10 hours x 16,000 days = $40,000,000
Cost of setting up the plant = $1.5 million + $0.2 million + $75,000 + $40,000 = $1,615,000
Total savings in hiring charges = $40,000,000 - $1,615,000 = $38,385,000
(c) Rental revenue from renting out the processing plant can be calculated as follows:
Rental revenue per year = $280 x 8 hours x 250 days = $560,000
Total rental revenue for five years = $560,000 x 5 = $2,800,000
(d) The net present value (NPV) method calculates the present value of all expected cash inflows and outflows of a project, using a discount rate to adjust for the time value of money. The benefit-cost ratio (BC-R) method measures the ratio of the present value of expected cash inflows to the present value of expected cash outflows.
NPV can be calculated as follows:
Year 0:
Initial investment = -$1,615,000
Year 1-4:
Cash inflows = Rental revenue + Tax savings on depreciation
= $560,000 x (1 - 0.3) + ($1,615,000 x 0.25 x (1 - 0.3))
= $452,600
Cash outflows = Operating expenses + Financing costs
= $30,000 + $50,000 + $140,000 + $20,000
= $240,000
Discount factor at 12% = 1 / (1 + 0.12)^n, where n is the year
NPV = Sum of (Cash inflows - Cash outflows) x Discount factor
= -$1,615,000 + ($452,600 x 0.893) + ($452,600 x 0.797) + ($452,600 x 0.712) + ($452,600 x 0.636)
= $366,420
BC-R can be calculated as follows:
Present value of cash inflows = $452,600 x (1 / (1 + 0.12)^1) + $452,600 x (1 / (1 + 0.12)^2) + $452,600 x (1 / (1 + 0.12)^3) + $452,600 x (1 / (1 + 0.12)^4)
= $1,384,511
Present value of cash outflows = $1,615,000
BC-R = Present value of cash inflows / Present value of cash outflows
= $1,384,511 / $1,615,000
= 0.857
For more such questions on investment
https://brainly.com/question/29547577
#SPJ11
(Table) Germany has a comparative advantage in producing
Sweaters
Germany 6
Greece
4
Skirts
12
20
sweaters and skirts.
skirts only.
sweaters only.
neither good.
Answer:
sweaters only.
Explanation:
Comparative advantage is the ability of a firm or country to produce products using fewer resources than others. An institution or nation with a comparative advantage in producing certain goods or services will sell them at a lower price compared to others.
Given the same quantity of inputs, a country or company with a comparative advantage will produce more output units than the rivals. Germany has a comparative advantage over Greece in making sweaters. With the same inputs, Germany will produce six sweaters while Greece will produce four. However, Greece has a comparative advantage over Germany in making skirts.
what is the role of HR in the organization?
Answer:
department charged with finding, screening, recruiting and training job applicants as well as administering employee-benefit programmes
Explanation:
It is HRM's responsibility to ensure good working environment for the employee.
The lower-of-cost-or-market method cannot be applied to
O a. each item sold.
b. each major class or category of inventory.
Oc. inventory as a whole.
O d. each item in the inventory.
Option c is the most appropriate and accurate statement regarding the application of the lower-of-cost-or-market method. Option C
The LCM method is typically applied to inventory as a whole, rather than to each individual item or major class/category of inventory. It focuses on the aggregate value of inventory, considering the overall market conditions and the net realizable value of the entire inventory.
Applying the LCM method to each item sold (option a) would require evaluating and adjusting the value of each individual item at the time of sale, which is impractical and not consistent with the purpose of the LCM method.
Applying the LCM method to each major class or category of inventory (option b) would be a more feasible approach but may not provide a comprehensive evaluation of the inventory as a whole.
Option c correctly states that the LCM method is applied to inventory as a whole, considering the aggregate value of all items. By assessing the overall market value and comparing it with the cost, adjustments are made to ensure the inventory is reported at the lower of the two amounts.
Applying the LCM method to each item in the inventory (option d) would be cumbersome and unnecessary since the goal is to determine the overall value of inventory, not the value of individual items.
Option C
For more such questions on application visit:
https://brainly.com/question/24553900
#SPJ8