Baker's Pride Corporation is considering purchasing one of two new pizza convection ovens. Either oven would...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Baker's Pride Corporation is considering purchasing one of two new pizza convection ovens. Either oven would make it possible for the company to expand into gourmet frozen pizza ro be sold in supermarkets. Estimates regarding each oven are provided below. Original Cost Estimated Useful Life Annual Cash Flows Annual cash outflow Baker Delight $110,000 8 years $36,000 $11,000 Superior Baker $160,000 8 years $49,000 $14,000 Instructions Calculate the net present value and profitability index of each oven. Based on your calculations, which oven should be purchased? Assume a 9% discount rate. Note: factor for the present value of an ordinary annuity 8 years @9% = 5.53482 Baker's Pride Corporation is considering purchasing one of two new pizza convection ovens. Either oven would make it possible for the company to expand into gourmet frozen pizza ro be sold in supermarkets. Estimates regarding each oven are provided below. Original Cost Estimated Useful Life Annual Cash Flows Annual cash outflow Baker Delight $110,000 8 years $36,000 $11,000 Superior Baker $160,000 8 years $49,000 $14,000 Instructions Calculate the net present value and profitability index of each oven. Based on your calculations, which oven should be purchased? Assume a 9% discount rate. Note: factor for the present value of an ordinary annuity 8 years @9% = 5.53482
Expert Answer:
Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-0470477144
5th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
Students also viewed these accounting questions
-
BAK Ltd. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently is not equipped to do. Estimates...
-
Bridgeport Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently is not equipped to do. Estimates...
-
BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isnt equipped to do. Estimates regarding...
-
Water is pumped out of a holding tank at a rate of 5 5e 0.12t liters/minute, where t is in minutes since the pump is started. If the holding tank contains 1000 liters of water when the pump is...
-
Define aggregate planning.
-
a. Given that dc = 0.987, determine the corresponding value of dc. b. Given dc = 120, determine the corresponding value of . c. Given that dc = 180 and IC = 2.0 mA, find IE and IB.
-
Separation of duties refers to separating all of these functions except which of the following? a. Authorizing transactions b. Keeping accounting records C. Hiring personnel d. Maintaining custody of...
-
Aztec Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of May 31 have been taken from...
-
Consider the CRISP data mining methodology. This contains many tasks and phases which not only flow from one to another but are also interactive. Consider a typical application such as tackling the...
-
Consider a welfare program (such as SNAP) with benefits that decrease as an individuals income increases. Draw the individuals budget constraint with and without the subsidy. (Put hours of work on...
-
Here is a table with information about some students: Name StudentID 123456 Joe Smith Abby Jones 234567 Credits GPA. 3.2 24 3.6 220 And a ToDo list transaction based on Joe earning an A in a 4 credit...
-
What is meant by the term business model?
-
What is the relationship between the social value proposition of a social venture and its mission?
-
Is a venture that offers dry-cleaning services using environmentally friendly processes and cleaning products a social venture? Why, or why not?
-
If you were to guess, what percentage of social entrepreneurs engage in formal assessment of their ideas as compared with those who do so informally? Explain your reasoning. What are the advantages...
-
Which do you think is more important to a social entrepreneurs intention: perceived desirability or perceived feasibility? Explain your answer.
-
Matthew is discussing travel expenses with his accountant, who reminds him that these expenses must be appropriately substantiated to be deducted or reimbursed. matthew asks how he would go about...
-
After Theorem 1.5 we note that multiplying a row by 0 is not allowed because that could change a solution set. Give an example of a system with solution set S0 where after multiplying a row by 0 the...
-
Castle Company is considering the purchase of a new machine. The invoice price of the machine is $125,000, freight charges are estimated to be $4,000, and installation costs are expected to be...
-
Coats Galore, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats. Compute the activity-based overhead rates using the following budgeted...
-
In alphabetical order below are current asset items for Diaz Company's balance sheet at December 31, 2011. Prepare the current assets section (including a complete heading). Accounts receivable...
-
Identify the singularity and find the nature of solution near the singularity for van der Pol's equation: \[\ddot{x}-\alpha\left(1-x^{2} ight) \dot{x}+x=0\]
-
The phase-plane equation of a single-degree-of-freedom system is given by \[\frac{d y}{d x}=\frac{-c y-\left(x-0.1 x^{3} ight)}{y}\] Investigate the nature of singularity at \((x, y)=(0,0)\) for...
-
Solve Problem 13.30 for a simple pendulum: \[\ddot{\theta}+\omega_{n}^{2} \sin \theta=0\] Data From Problem 13.30:- Identify the singularity and investigate the nature of solution near the...
Study smarter with the SolutionInn App