Consider a four-year project with the following information:

initial fixed asset investment = $440,000

straight-line depreciation to zero over the four-year life

zero salvage value

price: $25

variable costs: $15

fixed costs: $130,000

quantity sold: 73,000 units

tax rate: 35 percent

How sensitive is OCF to changes in quantity sold?

Answers

Answer 1

The operating cash flow (OCF) is sensitive to changes in quantity sold. A 1% increase in quantity sold will lead to a 1.11% increase in OCF.

The OCF is calculated as follows:

OCF = (Price - Variable Costs) * Quantity Sold - Fixed Costs

In this case, the price is $25, the variable costs are $15, the fixed costs are $130,000, and the quantity sold is 73,000 units. Plugging these values into the formula, we get the following OCF:

OCF = (25 - 15) * 73,000 - 130,000 = $466,800

A 1% increase in quantity sold will lead to an increase in OCF of:

(25 - 15) * 0.01 * 73,000 - 0 = $8,690

This represents a 1.11% increase in OCF.

Visit here to learn more about operating cash flow:

brainly.com/question/10922478

#SPJ11

Related Questions

1-α Suppose that production function is given as Y = KªL¹-a (constant returns to scale Cobb-Douglas formulation). According to Solow growth model steady-state equilibrium condition is derived as; dk/dt=sf(k)-(n+8)k=0 Here; s= saving rate (S/Y), n=constant rate of growth of Labor force: L(t)=L(0)ent 8= constant rate of depreciation of Capital Stock (K); k=K/L (Capital/Labor ratio or Capital per worker); f(k): Per worker production function: y=f(k) or Y/L=f(K/L). f(k)=ka. Per worker production function for Cobb Douglas formulation. If s=0.30, n=0.01, 8-0.09 and a=0.5; find steady-state equilibrium values for capital per worker k=-K/L and output per worker y=Y/L.

Answers

The steady-state equilibrium values for capital per worker (k) and output per worker (y) are as follows:

k = 3.8889

y = 1.9630

In the Solow growth model, the steady-state equilibrium condition is dk/dt = sf(k) - (n + δ)k

= 0, where:

Given the values:

s = 0.30

n = 0.01

δ = 0.09

a = 0.5

To find the steady-state equilibrium values for k and y, we can substitute the values into the equations.

Calculate the steady-state value of k:

dk/dt = sf(k) - (n + δ)k

= 0

0.30 * k^0.5 - (0.01 + 0.09) * k = 0

0.30 * k^0.5 - 0.1 * k = 0

Solving this equation will give us the value of k:

k = 3.8889

Calculate the steady-state value of y:

Using the per worker production function:

y = f(k) = k^0.5

Substituting the value of k into the equation:

y = 3.8889^0.5

y = 1.9630

The steady-state equilibrium values for capital per worker (k) and output per worker (y) are approximately k = 3.8889 and y = 1.9630, respectively. These values represent the long-term equilibrium levels where the growth rate of capital per worker is balanced with the combined effects of savings, depreciation, and labor force growth rate, resulting in a constant output per worker.

To know more about Equilibrium, visit

brainly.com/question/29618306

#SPJ11

Answers should be in complete sentences. Thoroughly explain your answer
Charlie is a big New York Giants fan. He gets a call from his friend, Jimmy, who tells him he can get three tickets to the next home game. Each ticket costs $250. Charlie says, "Yes! I will definitely go with you! I can’t wait to see the game!" Charlie calls his friend, Sebby, and tells him about the tickets and asks if he wants to go. Sebby says, "Are you kidding? $250?! I can watch it on TV for free. Forget it!"
What does this scenario illustrate about the economic concept of utility? How do Charlie and Sebby see the utility of going to the game differently?
2.What does the "price elasticity of demand" measure? What does a price elasticity coefficient of 1.2 mean? Does the product have an elastic, unitary elastic or inelastic demand?

Answers

1. The scenario depicts that Charlie and Sebby have a different understanding of the utility of going to the game. The economic concept of utility emphasizes the satisfaction derived from the use of a good or service. Here, Charlie is willing to pay $250 for the ticket to see his favorite team play.

The scenario of Charlie and Sebby attending the New York Giants game illustrates the concept of utility in economics. It emphasizes that utility is subjective and differs from person to person, and it is determined by the satisfaction derived from the use of goods and services. Charlie and Sebby's perception of utility on the ticket cost of $250 shows the difference in their preferences based on their willingness to pay.

Moreover, the scenario indicates that the value of a good or service depends on the utility that a person derives from it. In this case, Charlie is willing to pay $250 for the ticket, indicating that the utility of the game is high for him, while Sebby does not see the value of spending that much on a ticket since he can watch it for free at home. It is important to note that individuals will make a decision based on the total utility gained or the benefit of an action compared to its cost.

2. The "price elasticity of demand" measures the responsiveness of the demand for a product or service to a change in its price. A price elasticity coefficient of 1.2 means that the demand for a product is elastic. This means that when there is a small change in the price of the product, there will be a relatively larger change in the quantity demanded. In other words, the quantity demanded is highly sensitive to price changes. When the price increases, the quantity demanded decreases, and when the price decreases, the quantity demanded increases.

In conclusion, the scenario demonstrates that the economic concept of utility is subjective and varies from person to person. People will pay for goods or services based on the satisfaction derived from them. The value of a good or service is influenced by the perceived utility or satisfaction derived by a person. The product has an elastic demand since the coefficient of elasticity is greater than one. The reason for this is that there are many substitutes available in the market that can be used instead of the product. Consumers can quickly switch to other products if there is a small change in the price of the product. Hence, the product has an elastic demand, and its sales revenue will decrease when the price increases.

To know more about utility visit:

brainly.com/question/30369069

#SPJ11

Montgomery Antiques, Inc., began February with inventory of $48,600. The business made net purchases of $55,000 and had net sales of $80,900 before a fire destroyed the company's inventory. For the past several years, Montgomery's gross profit percentage has been 45%. Read the requirement. Use the gross margin method to estimate the cost of inventory destroyed. Cost of goods available Estimated cost of goods sold: Less: Estimated cost of goods sold Estimated cost of inventory destroyed Requirement 1. Estimate the cost of the inventory destroyed by the fire. Identify another reason that owners and managers use the gross profit method to estimate inventory.

Answers

The estimated cost of the inventory destroyed by the fire is $67,195. The gross profit method is a simple way to estimate inventory when physical counts are not possible or practical, and can be useful for internal analysis or interim financial reporting.

To estimate the cost of inventory destroyed by the fire using the gross margin method, we first need to calculate the estimated cost of goods sold.

Cost of goods available = Beginning inventory + Net purchases = $48,600 + $55,000 = $103,600

Estimated cost of goods sold = Gross profit percentage x Net sales

= 0.45 x $80,900

= $36,405

Estimated cost of inventory destroyed = Cost of goods available - Estimated cost of goods sold

= $103,600 - $36,405

= $67,195

Therefore, the estimated cost of the inventory destroyed by the fire is $67,195. Another reason why owners and managers use the gross profit method to estimate inventory is to monitor and evaluate the profitability of the business.

By comparing the gross profit margin to previous periods or industry averages, they can assess the efficiency of inventory management, pricing strategies, and overall financial performance.

The gross profit method provides a quick and straightforward way to estimate inventory, which can be useful for interim financial reporting, internal analysis, or when physical inventory counts are not feasible or impractical.

However, it's important to note that the gross profit method is an estimation technique and should not replace a comprehensive physical inventory count for accurate financial reporting purposes.

In conclusion, the gross profit method is not only used to estimate the cost of inventory destroyed but also serves as a valuable tool for evaluating profitability and monitoring the financial health of a business. Therefore, the estimated cost of the inventory destroyed by the fire is $67,195.

To know more about inventory refer here:

https://brainly.com/question/31746182#

#SPJ11

1. Your brother plans to borrow $49,000 at a 10.3% interest rate compounded annually. The contract terms require your brother to amortize the loan with 7 equal payments each made at the end of each year. He asks for your help to construct an amortization schedule showing details of the payments. Answer the following question:

This question is an example of what?

2. Your brother plans to borrow $49,000 at a 10.3% interest rate compounded annually. The contract terms require your brother to amortize the loan with 7 equal payments each made at the end of each year. He asks for your help to construct an amortization schedule showing details of the payments. Answer the following question:

Before an amortization schedule is constructed, which TVM variable should be set equal to zero in the financial calculator?

3.

Your brother plans to borrow $49,000 at a 10.3% interest rate compounded annually. The contract terms require your brother to amortize the loan with 7 equal payments each made at the end of each year. He asks for your help to construct an amortization schedule showing details of the payments. Answer the following question:

Before an amortization schedule is constructed, you need to solve for a variable first by pressing ------------ in the financial calculator?

Answers

For the given amount and interest rate answer of the following are,

1. This question is an example of a financial calculation or problem related to loan amortization.

2. Before an amortization schedule is constructed,

the TVM variable that should be set equal to zero in the financial calculator is the 'Future Value' (FV) variable.

3. Before constructing an amortization schedule,

solve for a variable first by pressing the appropriate function key, such as the 'PV' (Present Value) key, in the financial calculator.

1. It involves determining the payment schedule and details for a loan with specific terms,

such as the loan amount, interest rate, and number of payments.

The goal is to create an amortization schedule that outlines the repayment plan, including the amount of each payment, the interest

and principal portions of the payment, and the remaining balance after each payment.

2. Before constructing an amortization schedule, it is necessary to set the 'Future Value' (FV) variable equal to zero in the financial calculator.

This is because in an amortization schedule, the goal is to pay off the loan completely,

resulting in a zero balance at the end of the repayment period.

By setting the FV to zero, the financial calculator will calculate the appropriate payment amount needed to achieve this goal.

3. To construct an amortization schedule, you typically need to solve for a specific variable first.

The financial calculator provides various function keys for solving different variables, such as the 'PV' (Present Value) key,

which is used to solve for the loan amount or present value.

By entering the known variables, such as the interest rate, number of payments, and payment amount,

the financial calculator can calculate the missing variable.

Once the variable is determined, the amortization schedule can be constructed using the calculated values.

Learn more about interest rate here

brainly.com/question/31051181

#SPJ4

First consider a public good of value to Ann and Bob with the
property that the value of the good can be expressed in monetary
terms. In this case, the Samuelson condition states that the
efficient le

Answers

The Samuelson condition is a concept related to the efficient allocation of public goods. It states that for a public good to be efficiently allocated, the sum of individuals' marginal valuations of the good should equal the marginal cost of providing it.

The Samuelson condition addresses the challenge of efficiently allocating public goods, which are non-excludable and non-rivalrous in nature. In the case of a public good that can be valued in monetary terms, the condition states that the total value individuals place on the good, represented by their marginal valuations, should be equal to the marginal cost of producing the good. This condition ensures that resources are allocated efficiently, maximizing societal welfare. By equating the marginal benefits with the marginal costs, the condition provides a benchmark for determining the optimal level of provision for the public good.

It helps policymakers evaluate the efficiency of resource allocation and make informed decisions regarding the provision of public goods.

Learn more about policymakers here: brainly.com/question/30235859

#SPJ11

Blue Square Company is considering two projects: Project A Project B $400,000 $250,000 Initial investment Life of project Net present value 8 years 5 years $2,830.50 $15,110.00 Blue Square requires a minimum rate of return of 9%. Evaluate both projects and determine the annual cash flows of each. O Cash flow of Project A is $75,000; Project B is $54,000. O Cash flow of Project A is $75,000; Project B is $65,000. O Cash flow of Project A is $82,000; Project B is $54,000. O Cash flow of Project A is $82,000; Project B is $65,000.

Answers

The cash flow of Project A is $82,000, and the cash flow of Project B is $54,000.

To evaluate the annual cash flows of each project, we need to consider the net present value (NPV) and the initial investment of each project. Project A has an NPV of $2,830.50, and Project B has an NPV of $15,110.00. Blue Square Company requires a minimum rate of return of 9%. Based on these figures, we can calculate the annual cash flows.

For Project A, the initial investment is $400,000, and the NPV is positive. To determine the annual cash flow, we divide the NPV by the present value annuity factor for 8 years at a 9% rate of return. The calculation results in an annual cash flow of approximately $82,000.

For Project B, the initial investment is $250,000, and the NPV is also positive. Similar to Project A, we divide the NPV by the present value annuity factor for 5 years at a 9% rate of return. The calculation yields an annual cash flow of approximately $54,000.

Therefore, the cash flow of Project A is $82,000, and the cash flow of Project B is $54,000.

To learn more about initial investment; -brainly.com/question/31635721

#SPJ11

Project L requires an initial outlay at t=0 of $68,524, its expected cash inflows are $12,000 per year for 9 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.

Answers

We must determine the discount rate at which the current value of cash inflows equals the original outlay in order to get the Internal Rate of Return (IRR) for Project L.

For nine years, $12,000 in predicted cash inflows per year. We discount these cash flows using the project's 11% Weighted Average Cost of Capital (WACC) to get their present value.The present value of the cash inflows is determined by applying the method for calculating the present value of an annuity. PV is calculated as follows: (Cash inflow / Discount rate) * (1 - (1 / (1 + Discount rate)n) PV = ($12,000 / 0.11) * (1 - (1 / (1 + 0.11)^9)) PV = $66,525.49 We know that the IRR is higher since the present value of the cash inflows ($66,525.49) is lower than the original outlay ($68,524)

Learn more about Rate of Return here:

https://brainly.com/question/9217875?

#SPJ11

4. You are the actuary for a company that sells a fully discrete 100,000 2-year term life insurance to 60-year-olds. The policy has no cash surrender value. a) Calculate the level premium for this insurance (3 marks) b) Your company now offers a policy with the same benefit, but with a single premium. You assume that this new policy will have no lapses. All other assumptions and features remain unchanged. Justify the assumption of no lapses for this new policy. (3 marks)

Answers

To calculate the level premium for the fully discrete 100,000 2-year term life insurance policy, we need to consider the mortality table for 60-year-olds and apply the principles of actuarial mathematics.

The level premium can be determined by dividing the present value of death claims by the present value of policyholders. In this case, since the policy is for a 2-year term, we need to calculate the present value of the death claims over the 2-year period.

Let's assume the mortality table indicates a probability of death for 60-year-olds as 0.02 (2%) per year. Since the policy is for 2 years, the probability of surviving the term is (1 - 0.02) * (1 - 0.02) = 0.96 * 0.96 = 0.9216.

The present value of death claims can be calculated as follows:

Present Value of Death Claims = Death Benefit * Probability of Dying within the Term * Present Value Factor

In this case, the death benefit is $100,000, the probability of dying within the term is 1 - Probability of surviving the term = 1 - 0.9216 = 0.0784, and the present value factor can be obtained from an appropriate interest rate table or formula. Let's assume the present value factor is 0.95.

Present Value of Death Claims = $100,000 * 0.0784 * 0.95 = $7,392

To calculate the present value of policyholders, we need to consider the premium payment period and the interest rate. Since the policy is fully discrete, meaning the premium is paid upfront, the premium payment period is 0 years.

Present Value of Policyholders = Premium Payment * Present Value Factor

Since the premium is a level premium, it remains constant over the 2-year term. Let's assume the premium payment is $X, and the present value factor is 0.95.

Present Value of Policyholders = $X * 0.95

To calculate the level premium, we equate the present value of death claims and the present value of policyholders:

$7,392 = $X * 0.95

Solving for $X, we get:

$X = $7,392 / 0.95 ≈ $7,779.47

Therefore, the level premium for this insurance is approximately $7,779.47.

The assumption of no lapses for the new policy with a single premium can be justified based on the policy design and the behavior of the policyholders.

A single premium policy requires the policyholder to make a one-time payment upfront, covering the entire premium for the policy duration. Since the policy has no cash surrender value, the policyholder does not have the option to surrender the policy and receive any cash value.

With a fully discrete policy, lapses are less likely to occur compared to policies with annual or periodic premiums. The absence of annual premium payments reduces the financial burden and administrative hassle for the policyholder, increasing the likelihood of policy retention.

Furthermore, the assumption of no lapses can be justified if the policyholder perceives the policy as a good value proposition, considering the benefit and the cost. If the policy offers competitive coverage and the single premium is affordable and reasonable, the policyholder may be less inclined to let the policy lapse.

It's important to note that the assumption of no lapses is an idealized assumption and may not reflect the actual lapse behavior. Actual experience may vary, and insurers need to monitor policyholder behavior and lapse rates to ensure the accuracy of their assumptions.

Learn more about insurance ,visit:

https://brainly.com/question/25855858

#SPJ11

Explain Final-offer arbitration?(10 Marks)

Answers

Final-offer arbitration is a type of dispute resolution process in which a third-party arbitrator chooses one of the parties' final offers to settle the dispute.

In this process, each party presents a final offer for the arbitrator to choose, and the arbitrator must choose one offer or the other, with no room for compromise.

Final-offer arbitration is a type of binding arbitration that is typically used in labor disputes, collective bargaining agreements, and other situations where there is a deadlock between the parties. It is also commonly used in situations where the parties have already tried to negotiate a settlement but have been unable to reach an agreement.

In final-offer arbitration, each party submits a final offer to the arbitrator, and the arbitrator is required to choose one of the offers as the final settlement. This type of arbitration is seen as a fair way to resolve disputes because it encourages the parties to make reasonable offers that take into account the other party's interests and needs.

Thus, final-offer arbitration is a useful method for resolving disputes when the parties are unable to reach a settlement through negotiation. It provides a fair and impartial decision, and encourages both parties to make reasonable offers that can lead to a quicker resolution of the dispute.

Learn more about Final-offer arbitration here:

https://brainly.com/question/25410849

#SPJ11

Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information:
Units Costs
Beginning work in process (27% complete) 36,000 Direct materials $48,000
Conversion cost 105,000
Total cost of beginning work in process $153,000
Number of units started 74,000 Number of units completed and transferred to finished goods ? Ending work in process (52% complete) 89,000 Current period costs Direct materials $91,000
Conversion cost 161,000
Total current period costs $252,000
1 & 2. Using the weighted-average method of process costing, prepare each of the following steps:
a. Reconcile the number of physical units worked on during the period.
b. Calculate the number of equivalent units.
c. Calculate the cost per equivalent unit.
d. Reconcile the total cost of work in process.

Answers

Reconcile the number of physical units worked on during the period: 163,000 units (74,000 started + 89,000 ending work in process).

Calculate the number of equivalent units: Direct materials - 123,720 units (36,000 × 27% + 89,000 × 52%), Conversion cost - 133,780 units (36,000 × 73% + 89,000 × 48%).c. Calculate the cost per equivalent unit: Direct materials - $0.39 ($48,000 ÷ 123,720), Conversion cost - $0.79 ($105,000 ÷ 133,780).d. Reconcile the total cost of work in process: $155,992 (123,720 × $0.39 + 133,780 × $0.79).a. The number of physical units worked on during the period is calculated by adding the units started to the ending work in process.b. Equivalent units are calculated by considering the percentage of completion for both direct materials and conversion cost for the beginning work in process and ending work in process.c. The cost per equivalent unit is calculated by dividing the total cost of each component (direct materials and conversion cost) by the respective equivalent units.d. The total cost of work in process is reconciled by multiplying the cost per equivalent unit by the equivalent units for each component and summing them up.

Learn more about equivalent here:

https://brainly.com/question/25197597

#SPJ11

March 2021 Required: (b) 5 10 14 18 22 27 Transactions Credit sales to Starex Enterprise amounting to RM50,000. Jamil, a debtor, sent a cheque for RM2,380 in part settlement of a debt of RM3,490. Tuah Azman wrote the balance off as a bad debt. Tuah Azman took goods amounting to RM1,790 and withdrew cash, RM875, for personal usage. Paid fire insurance premium amounting to RM1,000 by online banking. The business imported a machine from Excel Pte Ltd. The details of expenditure related to this machine were as follow. All payments in Ringgit Malaysia were made by direct telegraphic transfer. Price of machinery General administrative costs Insurance on shipment Import duties and taxes Delivery costs Installation charges Testing of machine for samples 40,000 1,000 5,000 2,000 2,000 4,000 3,000 Received payment from Starex Enterprise for RM35,000 by cheque. Prepare the journal entries for all the above transactions with narrations. (10 marks) Required: (a) March 2021 (b) 5 10 14 18 22 27 Transactions Credit sales to Starex Enterprise amounting to RM50,000. Jamil, a debtor, sent a cheque for RM2,380 in part settlement of a debt of RM3,490. Tuah Azman wrote the balance off as a bad debt. Tuah Azman took goods amounting to RM1,790 and withdrew cash, RM875, for personal usage. Paid fire insurance premium amounting to RM1,000 by online banking. The business imported a machine from Excel Pte Ltd. The details of expenditure related to this machine were as follow. All payments in Ringgit Malaysia were made by direct telegraphic transfer. Price of machinery General administrative costs Insurance on shipment Import duties and taxes Delivery costs Installation charges Testing of machine for samples 40,000 1,000 5,000 2,000 2,000 4,000 3,000 Received payment from Starex Enterprise for RM35,000 by cheque. Calculate the capital of Tuah Azman business as at 28th February 2021. Prepare the journal entries for all the above transactions with narrations. (2 marks) (10 marks)

Answers

The journal entries for the given transactions in March 2021 include credit sales, debt settlement, bad debt write-off, personal use of goods, insurance payment, machine acquisition, and payment receipt.

These entries accurately record the financial transactions, reflecting their impact on relevant accounts.

The journal entries for the given transactions are as follows:

March 5:

Accounts Receivable (Starex Enterprise) 50,000

Sales Revenue 50,000 (Credit sales to Starex Enterprise)

March 10:

Cash (Jamil) 2,380

Accounts Receivable (Jamil) 2,380 (Partial settlement of debt)

March 14:

Bad Debts Expense 1,110

Allowance for Doubtful Debts 1,110 (Writing off the balance as a bad debt)

March 18:

Drawings (Tuah Azman) 1,790

Inventory 1,790 (Taking goods for personal usage)

March 22:

Drawings (Tuah Azman) 875

Cash 875 (Withdrawing cash for personal usage)

March 27:

Prepaid Insurance 1,000

Cash 1,000 (Payment for fire insurance premium)

Machine Acquisition:

Machinery 40,000

General Administrative Costs 1,000

Insurance on Shipment 5,000

Import Duties and Taxes 2,000

Delivery Costs 2,000

Installation Charges 4,000

Testing of Machine for Samples 3,000

Accounts Payable (Excel Pte Ltd) 57,000 (Acquisition of machine)

March 27:

Cash (Starex Enterprise) 35,000

Accounts Receivable (Starex Enterprise) 35,000 (Received payment from Starex Enterprise)

The above journal entries reflect the transactions that occurred in March 2021. Each entry includes the accounts affected, the respective amounts, and a narration explaining the nature of the transaction.

In summary, the journal entries recorded the credit sales, partial settlement of debt, write-off of a bad debt, goods taken for personal use, payment of fire insurance premium, acquisition of a machine, and receipt of payment from Starex Enterprise. These entries ensure accurate recording of the financial transactions in the accounting system, reflecting the impact on various accounts.

To learn more about journal entries click here: brainly.com/question/29314309

#SPJ11

The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R\&D department. The equipment's basic price is $70,000, and it would cost another $15,000 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $30,000. The MACRS rates for the first 3 years are 0.3333,0.4445, and 0.1481. Use of the equipment would require an increase in net working capital (spare parts inventory) of $4,000. The machine would have no effect on revenues, but it is expected to save the firm $25,000 per year h before-tax operating costs, mainly labor. The firm's marginal federal-plus-state tax rate is 40%. a. What is the Year-0 net cash flow? b. What are the net operating cash flows in Years 1,2 , and 3 ? c. What is the additional (nonoperating) cash flow in Year 3? d. If the project's cost of capital is 10%, should the chromatograph be purchased?

Answers

The Year-0 net cash flow is -$89,000. The net operating cash flows in Years 1, 2, and 3 are $16,832, $19,956, and $11,648, respectively. The additional cash flow in Year 3 is $30,000. To decide if the chromatograph should be purchased, calculate the project's net present value (NPV) using a 10% cost of capital.

a. The Year-0 net cash flow is calculated by subtracting the initial cash outflow from the initial cash inflow. In this case, the initial cash outflow includes the basic price of the equipment ($70,000), modification costs ($15,000), and the increase in net working capital ($4,000). The initial cash inflow is $0 since there are no immediate cash inflows associated with the purchase. Therefore, the Year-0 net cash flow is:

Year-0 net cash flow = (-$70,000) + (-$15,000) + (-$4,000) = -$89,000

b. The net operating cash flows in Years 1, 2, and 3 are calculated by subtracting the before-tax operating cost savings from the depreciation tax shield. The depreciation tax shield is the product of the depreciation expense and the marginal tax rate.

Year 1:

Net operating cash flow = ($25,000 * (1 - 0.4)) + ($70,000 * 0.3333 * 0.4) = $7,500 + $9,332 = $16,832

Year 2:

Net operating cash flow = ($25,000 * (1 - 0.4)) + ($70,000 * 0.4445 * 0.4) = $7,500 + $12,456 = $19,956

Year 3:

Net operating cash flow = ($25,000 * (1 - 0.4)) + ($70,000 * 0.1481 * 0.4) = $7,500 + $4,148 = $11,648

c. The additional (nonoperating) cash flow in Year 3 is the cash inflow from the sale of the chromatograph. It is given as $30,000.

d. To determine whether the chromatograph should be purchased at a cost of capital of 10%, we need to calculate the net present value (NPV) of the project. The NPV is obtained by discounting the cash flows of the project at the cost of capital and subtracting the initial investment.

By discounting the net cash flows from Years 0 to 3 at 10%, we find:

Year 0: -$89,000 / (1 + 0.10)^0 = -$89,000

Year 1: $16,832 / (1 + 0.10)^1 = $15,301

Year 2: $19,956 / (1 + 0.10)^2 = $16,324

Year 3: ($11,648 + $30,000) / (1 + 0.10)^3 = $32,302

Calculating the NPV:

NPV = Sum of discounted cash flows - Initial investment

= -$89,000 + $15,301 + $16,324 + $32,302

= -$25,073

Since the NPV is negative (-$25,073), it suggests that the present value of the cash inflows from the project is lower than the initial investment. Therefore, at a cost of capital of 10%, the chromatograph should not be purchased as it is expected to result in a negative net present value.

Learn more about Present value: https://brainly.com/question/30390056

#SPJ11

In Project Cost Management you estimate costs, determine a budget and control the costs involved. Fill in the inputs, tools and techniques and outputs for each with the words below. Scope baseline, project schedule, human resource plan, risk register enterprise environmental factors, organizational process assets, expert judgement, analogous estimating, parametric estimating, bottom-up estimating, three-point estimates, cost of quality, reserve analysis, project management estimating software, activity cost estimates, basic of estimates, project document updates, activity cost estimates, project schedule, resource calendars, contracts, scope baseline, organizational process assets, cost aggregation, reserve analysis, expert judgement, historical relationships, funding limit reconciliation, cost performance baseline, project funding requirements, project document updates, project management plan, project funding requirements, work performance information, organizational process assets, earned value management, forecasting, to-complete performance index, performance reviews, variance analysis, project management software, work performance measurements, budget forecasts, organizational process assets updates, change requests, project management plan updates, project document updates.
a. Estimate costs Inputs Tools and Techniques Outputs
b. Determine budget Inputs Tools and Techniques Outputs
c. Cost Control

Answers

Project Cost Management involves estimating costs, determining a budget, and controlling costs throughout the project lifecycle.

a. Estimate costs Inputs: Scope baseline, project schedule, human resource plan, risk register, enterprise environmental factors, organizational process assets.

Tools and Techniques: Expert judgment, analogous estimating, parametric estimating, bottom-up estimating, three-point estimates, cost of quality, reserve analysis, project management estimating software.

Outputs: Activity cost estimates, basis of estimates, project document updates.

b. Determine budget Inputs: Activity cost estimates, project schedule, resource calendars, contracts, scope baseline, organizational process assets.

Tools and Techniques: Cost aggregation, reserve analysis, expert judgment, historical relationships, funding limit reconciliation.

Outputs: Cost performance baseline, project funding requirements, project document updates, project management plan updates.

c. Cost Control Inputs: Cost performance baseline, project funding requirements, project management plan, project funding requirements, work performance information, organizational process assets, earned value management.

Tools and Techniques: Forecasting, to-complete performance index, performance reviews, variance analysis, project management software, work performance measurements, budget forecasts.

Outputs: Organizational process assets updates, change requests, project management plan updates, project document updates.

a. Estimate costs involves gathering the necessary information such as scope baseline, project schedule, human resource plan, risk register, and environmental factors. The tools and techniques used include expert judgment, analogous estimating, parametric estimating, and bottom-up estimating. The outputs of this process are activity cost estimates and the basis of estimates, which are documented in the project documents.

b. Determine budget uses the activity cost estimates from the previous step along with the project schedule, resource calendars, contracts, scope baseline, and organizational process assets as inputs. The tools and techniques employed include cost aggregation, reserve analysis, expert judgment, and historical relationships. The outputs are the cost performance baseline, project funding requirements, and updates to the project management plan and project documents.

c. Cost Control relies on inputs such as the cost performance baseline, project funding requirements, project management plan, work performance information, and organizational process assets. The tools and techniques used include forecasting, to-complete performance index, performance reviews, variance analysis, project management software, work performance measurements, and budget forecasts. The outputs of this process are updates to the organizational process assets, change requests, and updates to the project management plan and project documents.

Project Cost Management involves estimating costs, determining a budget, and controlling costs throughout the project lifecycle. It requires inputs such as project scope, schedule, resource plans, and risk registers, and utilizes various tools and techniques including expert judgment, estimating techniques, and analysis methods. The outputs include activity cost estimates, budget baselines, and updates to project documentation and management plans. By effectively estimating and controlling costs, project managers can ensure the project remains within budget and achieve its financial objectives.

To know more about controlling follow the link:

https://brainly.com/question/26398073

#SPJ11

Budgeting can be an important management tool if implemented properly. Identify several positive results when budgets are used properly. Since budgets affect people, identify several negative aspects if budgets are not implemented properly.

Answers

If done correctly, budgeting can be a useful management tool. Budgets touch people, thus if they are not correctly executed, there may be a number of drawbacks.

When budgets are used properly, positive results can be -

Budgets encourage financial discipline by establishing expenditure caps and ensuring that resources are distributed effectively. Better financial management and spending control may result from this.Setting financial objectives and making future plans is made easier with the use of budgets. They offer a guide for hitting goals, effectively allocating resources, and directing decision-making in line with organisational goals.Budgets make it easier to allocate resources in accordance with objectives and strategic goals. They aid in determining where to spend, how to decrease costs, and how to reallocate resources to maximise performance and accomplish desired results.

When budgets are not used properly, negative results can be -

Budgets that are established too high or without adequate consideration of the resources at hand may put pressure on staff members to meet impossible goals, which can cause dissatisfaction, burnout, and demotivation.Strict budgeting procedures may limit adaptability and make it more difficult to deal with unforeseen events or changing business conditions. This may make it more difficult for a firm to properly address emerging possibilities or difficulties.Poor budgeting may promote a short-term concentration on achieving immediate financial goals at the expense of long-term strategic objectives. This may prevent funds from being allocated to innovative, and other projects necessary for long-term development.

Answers

The statement "The opportunity forgone alternative that was not chosen" is true. The statement "The cost of a choice is the value of the alternative that was not chosen" is false. Economists use the concept of elasticity to measure how much consumers respond to changes in variables.

The concept of opportunity cost refers to the value of the alternative that is forgone when a choice is made. When making a decision, individuals or businesses must consider the potential benefits or values associated with each alternative and choose one over the others. Therefore, the opportunity forgone alternative represents the value of the option that was not chosen.

On the other hand, the cost of a choice refers to the value of what is given up when selecting a particular option. It does not necessarily equate to the value of the alternative that was not chosen. The cost of a choice can include various factors such as monetary expenses, time, effort, or resources.

To measure how consumers respond to changes in variables such as price, income, or other factors, economists use the concept of elasticity. Elasticity measures the responsiveness of demand or supply to changes in these variables. It helps economists understand the magnitude of the impact and how consumers adjust their behavior based on these changes.

In conclusion, the opportunity forgone alternative is indeed the value of the option that was not chosen, while the cost of a choice is not necessarily equal to the value of the alternative. Economists use elasticity to quantify consumer responsiveness to changes in variables.

Learn more about elasticity here: brainly.com/question/30689553

#SPJ11

There are five products and their optimal order intervals are computed as below. Following the optimal power-of-2 policy, build an order schedule for 10 weeks in terms of when/what/how much to order. Use D=1,000 units/year for each product (1 year = 52 weeks).

Product A: 1.5 weeks

Product B: 1.7 weeks

Product C: 2.8 weeks

Product D: 2.9 weeks

Product E: 5.0 weeks

Answers

The schedule accounts for the varying optimal order intervals for each product, ensuring that the ordering frequency is appropriate for their respective demand rates.

According to the optimal power-of-2 policy, the order schedule for the five products over a 10-week period is as follows:

Week 1: Order 2 units of Product A, 2 units of Product B, 1 unit of Product C, 1 unit of Product D, and 1 unit of Product E.

Week 2: Order 3 units of Product A, 2 units of Product B, 1 unit of Product C, 1 unit of Product D, and 0 units of Product E.

Week 3: Order 3 units of Product A, 3 units of Product B, 1 unit of Product C, 1 unit of Product D, and 0 units of Product E.

Week 4: Order 4 units of Product A, 3 units of Product B, 1 unit of Product C, 1 unit of Product D, and 0 units of Product E.

Week 5: Order 4 units of Product A, 4 units of Product B, 1 unit of Product C, 1 unit of Product D, and 0 units of Product E.

Week 6: Order 5 units of Product A, 4 units of Product B, 1 unit of Product C, 1 unit of Product D, and 0 units of Product E.

Week 7: Order 6 units of Product A, 4 units of Product B, 2 units of Product C, 1 unit of Product D, and 0 units of Product E.

Week 8: Order 7 units of Product A, 4 units of Product B, 2 units of Product C, 1 unit of Product D, and 0 units of Product E.

Week 9: Order 7 units of Product A, 5 units of Product B, 2 units of Product C, 1 unit of Product D, and 0 units of Product E.

Week 10: Order 8 units of Product A, 5 units of Product B, 2 units of Product C, 1 unit of Product D, and 0 units of Product E.

The order schedule follows the optimal power-of-2 policy, which means that the quantity ordered for each product doubles every time it is ordered. The schedule ensures that the products are ordered at intervals close to their optimal order intervals. By doubling the quantity with each order, the inventory can be efficiently managed while meeting the demand for each product.

To learn more about demand, click here:

brainly.com/question/30402955

#SPJ11

Your cousin Stephanie argues that some examples of an organization’s internal publics include competitors, suppliers, and marketing agencies. Because you read chapter 3, you know that the following are more accurate examples of internal publics:
Group of answer choices
the general public that is directly affected by the company
governmental departments and agencies that regulate businesses
neighborhood residents and community organizations
newspapers, magazines, television stations, blogs, and other Internet media
the managers, board of directors, and workers of the company

Answers

Stephanie's examples are actually external publics. Internal publics refer to individuals/groups within the company such as managers, board of directors, and workers.

Your cousin Stephanie's examples of competitors, suppliers, and marketing agencies are not accurate examples of an organization's internal publics.

The more accurate examples of internal publics, as mentioned in chapter 3, are:

The managers, board of directors, and workers of the company: These individuals are directly associated with the organization and play a crucial role in its operations and decision-making processes. They are considered internal stakeholders who have a direct impact on the organization's functioning and success.

Internal publics typically refer to individuals or groups within the organization itself who have a stake in its activities and outcomes. This includes employees at various levels, from top management to entry-level workers, who contribute to the organization's operations and success.

Internal publics are distinct from external publics, which include entities such as the general public, government agencies, media outlets, and community organizations. While external publics can have an influence on the organization, internal publics are directly involved in its day-to-day operations and have a more immediate impact.

It is important to recognize and engage with internal publics effectively to foster employee engagement, productivity, and organizational cohesion. Communication and relationship-building with internal publics are key for creating a positive work environment and achieving organizational goals.

Learn more about suppliers here:

https://brainly.com/question/9379790

#SPJ11

The manufacturing area has had a historical delay percentage of 7.9%. Management wants to verify that percentage using an alpha value of 7% and they are willing to tolerate an acceptable error of 2%. How large a sample will be necessary?

Answers

To verify the historical delay percentage with an alpha value of 7% and a tolerable error of 2%, the sample size required can be determined using the formula for sample size estimation.

To determine the required sample size, we need to consider the desired alpha value, tolerable error, and the historical delay percentage. The formula for sample size estimation in this case is:

n = (Z^2 * p * (1-p)) / E^2

Where:

n = sample size

Z = Z-score corresponding to the desired alpha value

p = historical delay percentage

E = tolerable error

Plugging in the values, Z = 1.04 (corresponding to alpha = 7%), p = 0.079 (7.9%), and E = 0.02 (2%), we can calculate the sample size as:

n = (1.04^2 * 0.079 * (1-0.079)) / 0.02^2

Simplifying the equation yields the required sample size.

Learn more about hypothesis testing: brainly.com/question/17099835

#SPJ11

Suppose the most you would be willing to pay for a 55 inch TV s $900 If you buy one for $400, then your economic surplus Multiple Choce O $400 5inch TV 50 $500

Answers

The economic surplus in this scenario is $500. The explanation is that economic surplus represents the difference between the maximum price a consumer is willing to pay and the actual price paid.

In this case, the consumer's maximum willingness to pay for a 55-inch TV is $900. However, they were able to purchase it for $400, resulting in a surplus of $500. This surplus signifies the additional value or satisfaction gained by the consumer from acquiring the TV at a price lower than their maximum willingness to pay. It reflects the consumer's economic benefit or gain in the transaction.

The economic surplus is an important concept in economics as it measures consumer surplus, which represents the difference between what a consumer is willing to pay and what they actually pay. In this case, the consumer's willingness to pay $900 indicates the value they place on the TV. By paying only $400, they enjoy a surplus of $500, indicating a significant economic gain. This surplus represents the net benefit received by the consumer and highlights the advantage of finding a good deal or purchasing a product at a price lower than its perceived value.

LEARN MORE ABOUT economic surplus here: brainly.com/question/14829124

#SPJ11

EPPE6024 b. Supposed the three equation of the double lag model is given as follows: I (Philips curve) л₁=¹о +α(y₁ - y₂) Y1-Ye=-a(ro-rs) (IS) T π₂-π² == - (y1 - Ye) αβ (MR) Using a mathematical model in a double lagged model, derive Taylor's rule equation. [6 marks] Using a PC-MR diagram, explain how the unemployment caused by disinflation is independent of the degree of inflation aversion (B) of the central bank. How does this finding change if the Philips curves are steeper (a > 1)? [8 marks] i. ii.

Answers

Taylor's rule equation derived from the double lagged model is:

i = π + r* + β(y - y^e)

To derive Taylor's rule equation from the double lagged model, we need to substitute the given equations into each other and solve for the interest rate (i). Let's go through the steps:

From the Phillips curve (inflation equation):

λ₁ = ¹₀ + α(y₁ - y₂)

From the IS curve (output equation):

Y₁ - Yₑ = -a(ro - rs)

From the monetary policy reaction function (interest rate equation):

π₂ - π² = - (y₁ - Yₑ) + αβ

We can substitute Y₁ - Yₑ in the monetary policy reaction function using the IS curve equation:

π₂ - π² = - (-a(ro - rs)) + αβ

π₂ - π² = a(ro - rs) + αβ

Now, substitute λ₁ into the monetary policy reaction function using the Phillips curve equation:

π₂ - π² = a(ro - rs) + αβ + α(y₁ - y₂)

π₂ - π² = a(ro - rs) + αβ + αy₁ - αy₂

Rearranging the terms, we get:

π₂ - π² + αy₁ = a(ro - rs) + αβ - αy₂

Finally, we can express the equation in terms of the interest rate (i):

i = π + r* + β(y - y^e)

The derived Taylor's rule equation from the double lagged model is:

i = π + r* + β(y - y^e)

In the PC-MR (Phillips curve-Monetary reaction) diagram, the vertical axis represents inflation (π), and the horizontal axis represents the output gap (y - y^e). The slope of the Phillips curve (a) measures the responsiveness of inflation to changes in the output gap.

When there is disinflation, the central bank aims to reduce inflation by decreasing the output gap. This leads to a movement along the Phillips curve to a lower level of inflation (π₂).

Impact of Steeper Phillips Curves (a > 1):

If the Phillips curves are steeper (a > 1), it implies a stronger relationship between inflation and the output gap. In this case, disinflation requires a larger decrease in the output gap to achieve a given reduction in inflation.

Therefore, when the Phillips curves are steeper (a > 1), the degree of inflation aversion (B) becomes more relevant in determining the level of unemployment resulting from disinflation.

To know more about Taylor's rule, visit;
https://brainly.com/question/19920758
#SPJ11

The equimarginal principle addresses A. equality B. efficiency C. willingness to pay D. aggregate benefits

Answers

The equimarginal principle addresses efficiency.

The equimarginal principle, also known as the principle of equal marginal utility or the principle of maximum satisfaction, is an economic concept that focuses on achieving efficiency in resource allocation. According to this principle, individuals or firms should allocate their resources in such a way that the marginal utility or benefit derived from the last unit of each resource is equal.

By allocating resources in this manner, the equimarginal principle ensures that no further reallocation can increase total utility or benefit. It aims to optimize resource allocation by maximizing overall satisfaction or utility.

While concepts such as equality, willingness to pay, and aggregate benefits are important in economics, the equimarginal principle specifically emphasizes efficiency in resource allocation. It provides guidance on how to allocate resources in a way that maximizes overall satisfaction and minimizes waste or inefficiency.

Therefore, the correct answer is B. efficiency. The equimarginal principle is concerned with achieving efficiency in resource allocation.

To learn more about equimarginal principle, here

https://brainly.com/question/13033788

#SPJ4

Suppose bank X has a total of $10,000 of deposits. The federal bank specified a required reserve ratio of 10% a) What is the required reserve for bank X? (5 Points) b) Due to some deposits and transfers Bank X now has a total reserve of $8,000. What is the excess reserve possessed by Bank x? (5 Points) c) What is the potential deposit creation of Bank X? (You need to compute the multiplier first) Points) (5

Answers

a) The required reserve for bank X is $1,000.

b) Bank X has an excess reserve of $7,000.

c) The potential deposit creation of Bank X is $70,000.

a) The required reserve for bank X can be calculated as follows:

Required Reserve = Total Deposits x Required Reserve Ratio

Required Reserve = $10,000 x 0.10

Required Reserve = $1,000

Therefore, the required reserve for bank X is $1,000.

b) Excess reserves are calculated by subtracting the required reserve from the total reserve:

Excess Reserves = Total Reserves - Required Reserve

Excess Reserves = $8,000 - $1,000

Excess Reserves = $7,000

Therefore, Bank X has an excess reserve of $7,000.

c) To calculate the potential deposit creation of Bank X, we need to first calculate the money multiplier. The money multiplier formula is:

Money Multiplier = 1 / Required Reserve Ratio

In this case, the required reserve ratio is 10%, so the money multiplier is:

Money Multiplier = 1 / 0.10

Money Multiplier = 10

The potential deposit creation of Bank X is calculated by multiplying the excess reserve by the money multiplier:

Potential Deposit Creation = Excess Reserves x Money Multiplier

Potential Deposit Creation = $7,000 x 10

Potential Deposit Creation = $70,000

Therefore, the potential deposit creation of Bank X is $70,000.

Learn more about Bank here:

https://brainly.com/question/29433277

#SPJ11

Go through the video of order taking process in a restaurant and write down important steps in the process of order taking. Posted Wed Jul 6, 2022 at 4:27 pm

Answers

Order taking is a critical step in the restaurant business, which is why it requires careful attention to detail. It involves receiving customer requests, interpreting them correctly, and transferring them to the kitchen staff. To avoid confusion and delays, it is critical to develop an effective order-taking process in the restaurant.

Here are some of the most critical steps involved in the order-taking process. Greeting the customer with a smile and offering menus:When a customer enters a restaurant, the first thing they expect is a warm greeting. Staff members must greet the customers with a smile and a friendly tone of voice. The staff should also provide menus to customers and ask them if they have any questions about the menu. Taking the order accurately.

The server should take the order accurately. This includes repeating the order to the customer to ensure that it is correct. This step is crucial because incorrect orders can result in unhappy customers. Transmitting the order to the kitchen:The order should be transferred to the kitchen as soon as possible. Therefore, it is critical to follow these steps to ensure customer satisfaction and restaurant success.

To know more about restaurant visit:-

https://brainly.com/question/32960992

#SPJ11

14.Revenue in 240 room hotel $179.000. Total Expenses is $125.000. What is the GoPar? 15. a hotel has a total of 150 rooms, of which the average occupancy rate is 90%. The average cost for a room is $145 a night. A hotel wants to know its RevPAR so it can accurately assess its performance. 16. a hotel has a total of 150 rooms, of which the average occupancy rate is 91%. The average cost for a room is $119 a night. A hotel warts to know its RevPAR so it can accurately assess its performance. 17. a hotel has a total of 170 rooms, of which the average occupancy rate is 93%. The average cost for a room is $187 a night. A hotel wants to know its RevPAR so it can accurately assess its performance. 18: a hotel has a total of 180 rooms, of which the average occupancy rate is 87%. The average cost for a room is $130 a night. A hotel wants to know its RevPAR so it can accurately assess its performance. 19. a hotel has a total of 119 rooms, of which the average occupancy rate is 70%. The average cost for a room is $100 a night. A hotel wants to know its RevPAR so it can accurately assess its performance. 20. a hotel has a total of 100 rooms, of which the average occupancy rate is 78%. The average cost for a room is $100 a night. A hotel wants to know its RevPAR so it can accurately assess its performance.

Answers

The higher the RevPAR or GoPar, the better the hotel's financial performance. By understanding these metrics, hotels can make informed business decisions to improve their financial performance.

In the hotel industry, one of the most commonly used metrics is RevPAR, which is calculated by dividing a hotel's total revenue by its available rooms. It is an important measure of a hotel's financial health since it reveals how much money is being generated per room in the property. The following are the calculations for each of the given questions:

GoPar = (Revenue - Total Expenses) / Number of Rooms

GoPar = ($179,000 - $125,000) / 240

GoPar = $2,333.3315.