The manager of a small business is considering lowering the price on his main product for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The manager of a small business is considering lowering the price on his main product for the coming year. If there is any increase in the company's current sales, the manager would have to acquire another delivery truck. He can obtain a used truck for $10,000. The market value of this truck would be expected to decline by $2,000 per year. Assume that the manager would earn 6 percent annual interest on the $10,000 if he did not buy the truck. What is the cost associated with this truck that is relevant to this pricing decision? The manager of a small business is considering lowering the price on his main product for the coming year. If there is any increase in the company's current sales, the manager would have to acquire another delivery truck. He can obtain a used truck for $10,000. The market value of this truck would be expected to decline by $2,000 per year. Assume that the manager would earn 6 percent annual interest on the $10,000 if he did not buy the truck. What is the cost associated with this truck that is relevant to this pricing decision?
Expert Answer:
Answer rating: 100% (QA)
Solution a Opportunity cast Annual perpetual interest PV ... View the full answer
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
Students also viewed these finance questions
-
The owner of a small business is considering purchasing production equipment having a total cost of $470,000. The new equipment will allow the owner to reduce labor and material cost; measured in...
-
Another example given by Rodriguez of a small business utilising innovative decision-making methods is Ramon Castillo, a metro Manila-based manufacturer of electronic equipment and gadgets. He...
-
Can the owner of a small business receive unemployment compensation? Explain.
-
Burger Prince buys top-grade ground beef for $1.00 per pound. A large sign over the entrance guarantees that the meat is fresh daily. Any leftover meat is sold to the local high school cafeteria for...
-
If Company A has a higher return on equity than Company B, does that necessarily mean that Company A's earnings should grow faster than Company B's earnings? Why?
-
Let V = xy 2 z, calculate the energy expended in transferring a 2-C point charge from (1, 1, 2) to (2, 1, 3).
-
Parents of minors took Apple to court in 2012 for supplying game applications, on iPhones, that were free but through which users could purchase in-game currencies. Apparently, parents would log on...
-
The Heat-Aire Company has two plants that produce identical heat pump units. However, production costs at the two differ due to the technology and labor used at each plant. The total costs of...
-
Which data model provides a user with the best "program-data independence"? A. Hierarchial Model B. Network Model C. Relational Model D. Entity Relationship Model Why?
-
Prepare the journal entries of the following transactions. 1. On January 1, 20XX, BVD Corp. issued 3,500 shares of $50 par, 7% preferred stock for $275,000. 2. On January 1, 20XX, BVD Corp. also...
-
1. A. You have been asked to calculate the NPV for a project based on the following details: The total money invested in the development of the project is 27 million dollars. The hurdle rate for the...
-
Tax Planning and Management -the situation here in PH -benefits -risks Effective Tax Management Explain -purpose -importance -examples
-
FIND TWO EXAMPLES OF MAGERY SAD BY STANLEY THAT REVEALS THE NATURE OF HIS RELATIONSHIP WITH STELLA.
-
Lovebrenn, an alien employed in Ultra Mega Petroleum Service contractor, received compensation income of P5M in 2021, inclusive of P400,000 13th month pay and other benefits. Lovebrenn's Income Tax...
-
Bella : She hates market risk. She saw her parents lose a bunch of money in 2008 and then again in 2020. She wants to be safe and smart so, she puts all her savings in her safe at home. She believes...
-
A block is pulled along a horizontal surface by a 50-N force that makes a 60 degree angle with respect to the horizontal. What distance should it be pulled if 75 J of work will be done by this force...
-
Why did the William Wordsworth feel lonely at the beginning in the poet: The Daffodils?
-
A bubble-point liquid feed is to be distilled as shown in Figure. Use the Edmister group method to estimate the mole-fraction compositions of the distillate and bottoms. Assume initial overhead and...
-
Andrea, who is in the 39.6% tax bracket, is interested in reducing her taxes. She is considering several alternatives. For each alternative listed below, indicate how much tax, if any, she would...
-
Maria was planning to paint the interior of her apartment over a three-day weekend. Her employer asked her to work all three days and will pay her $600 overtime. She called a professional painter who...
-
What is meant by economic performance?
-
Why may some people consider this to be incorrect? That is, why is the fact that the control account is kept in the General Ledger not enough to justify saying that the control account is part of the...
-
From the following figures, compile accounts receivable ledger and accounts payable ledger control accounts for the month, and ascertain what the net balances of the respective ledgers should be on...
-
The financial year of The Better Trading Company ended on 30 November 2014. You have been asked to prepare a Total Accounts Receivable Account and a Total Accounts Payable Account in order to produce...
Study smarter with the SolutionInn App