Factor Company is planning to add a new product to its line. To manufacture this product,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $487,000 cost with an expected four-year life and a $19,000 salvage value. Additional annual information for this new product line follows. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Required: 1. Determine income and net cash flow for each year of this machine's life. 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute net present value for this machine using a discount rate of 7%. (Do not round intermediate calculations. Round your present factor to 4 decimals and final answers to the nearest whole dollar.) Chart Values are Based on: Cash Flow Annual cash flow Salvage value Select Chart Present Value of an Annuity of 1 Net present value n = $ 1,970,000 1,460,000 117,000 163,000 < Required 2 Amount x PV Factor Required 3 > = = = Present Value $ 0 0 Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $487,000 cost with an expected four-year life and a $19,000 salvage value. Additional annual information for this new product line follows. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Required: 1. Determine income and net cash flow for each year of this machine's life. 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute net present value for this machine using a discount rate of 7%. (Do not round intermediate calculations. Round your present factor to 4 decimals and final answers to the nearest whole dollar.) Chart Values are Based on: Cash Flow Annual cash flow Salvage value Select Chart Present Value of an Annuity of 1 Net present value n = $ 1,970,000 1,460,000 117,000 163,000 < Required 2 Amount x PV Factor Required 3 > = = = Present Value $ 0 0
Expert Answer:
Answer rating: 100% (QA)
Required 1 Determine income and net cash flow for each year of this machines life To determine the i... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $ 480,000 cost with an expected four- year life and a $ 20,000...
-
If you want the formulas and any calculations, select the corresponding cell and press F2 (Function Key on key board), It will show all calculations and formulas Automatically Question Elite Company...
-
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $515,000 cost with an expected four-year life and a $11,000...
-
What other types of contingency planning should Matt and Chris include to make the report comprehensive? Please explain the relevance of each suggestion.
-
Nuncio Consulting completed the following transactions during June. a. Armand Nuncio, the owner, invested $35,000 cash along with office equipment valued at $11,000 in the new company. b. The company...
-
Consider each pair of structural formulas that follow and state whether the two formulas represent the same compound, whether they represent different compounds that are constitutional isomers of...
-
AutoAnswer, Inc., a manufacturer of telephone answering machines, uses a factory overhead applied rate to charge overhead costs to its manufactured products. The company manager estimates that...
-
The year-end adjusted trial balance of Aggies Corporation included the following account balances: Retained Earnings, $230,000; Service Revenue, $900,000; Salaries Expense, $390,000; Rent Expense,...
-
The management of Zigby Manufacturing prepared the following balance sheet for March 31. Cash Raw materials inventory Accounts receivable Finished goods inventory Equipment Less: Accumulated...
-
Consider the following relations for a mini world of credit). COMPANY. Answer all queries in the language asked for (alternate language gets no EMPLOYEE (FName, LName, SSN, Bdate, Address, Sex,...
-
Using the SCS method, determine the time of concentration (in hours) for a catchment with a flow length of 250ft and a slope of 2% (i.e. 0.02). The runoff occurs as sheet flow and the surface is...
-
Visit the website www.gartner.com. What type of scaling are they using in their surveys ranking vendor performances? Why did you choose this answer?
-
The convex surface of a plano-convex lens has an absolute value of radius of curvature of \(40 \mathrm{~mm}\). The index of refraction for the glass of which the lens is made is 1. 5 . (a) What is...
-
What factors influence the selection of one approach over another approach?
-
Describe a specific situation for which each of the following experimental designs is appropriate. Defend your reasoning. a. One-group pretest-posttest design b. Pretest-posttest control group design...
-
Why does ISO 21500:2012 appeal to organisations that have limited pro ject management experience?
-
Question: Define A JavaScript Function Named ActivityScore With One Parameter. Assume The Function Will Be Called With An Array Of
-
Could the owner of a business prepare a statement of financial position on 9 December or 23 June or today?
-
Use the following information about the cash flows of Valencia Company to prepare a complete statement of cash flows (direct method) for the year ended December 31, 2009. Use a note disclosure for...
-
George, Burton, and Dillman have been partners for three years. The partnership is being dissolved. George is leaving the firm, but Burton and Dillman plan to carry on the business. In the final...
-
Refer to the data in QS 10-1. Based on financial considerations alone, should Helix accept this order at the special price? Explain.
-
On January 1, 2011, Oswalt Company had a balance of \(\$ 156,000\) in its Land account. During 2011, Oswalt sold land that had cost \(\$ 66,000\) for \(\$ 98,000\) cash. The balance in the Land...
-
Security Services, Inc. (SSI), recognized \(\$ 2,400\) of sales revenue on account and collected \(\$ 1,900\) of cash from accounts receivable. Further, SSI recognized S900 of operating expenses on...
-
On January 1, 2011, MMC Company had a balance of \(\$ 700,000\) in its Bonds Payable account. During 2011, MMC issued bonds with a \(\$ 200,000\) face value. There was no premium or discount...
Study smarter with the SolutionInn App