Question: hello please help answer the attached ASAP. within 45 minutes Question: A proposed project will cost $600,000 and will provide returns of $150,000 in Year
hello please help answer the attached ASAP. within 45 minutes
Question: A proposed project will cost $600,000 and will provide returns of $150,000 in Year 1, $300,000 in Year 2, and $500,000 in Year 3. There will not be any cash flows associated with the project after Year 3. If taxes are ignored, and the company's hurdle rate is 15%, what is the net present value of the project? A $86,020 B $23,013 C $66,373 D $50,000 A company's required rate of return on capital budgeting projects is 15%. The company is considering an investment which would yield a cash flow of $20,000 in five years. What is the most that the company would be willing to invest in this project? (Ignore taxes) A B C D $9,944 $17,391 $13,111 $40,227 Goodeats Company owns a single restaurant which has a bar primarily used to seat patrons while they wait on their tables. The company is considering eliminating the bar and adding more dining tables. Segmented contribution income statements are as follows and fixed costs applicable to both segments are allocated on the basis of sales. Sales Variable costs Direct fixed costs Segment margin Allocated fixed costs Net Income Restaurant $600,000 375,000 50,000 Bar $200,000 160,000 15,000 Total $800,000 535,000 65,000 175,000 25,000 200,000 112,500 37,500 150,000 $62,500 ($12,500) $50,000 If Goodeats eliminates the Bar: A Total costs will decline by $175,000 B Net income will increase by $12,500 C Net income will decline by $25,000 D Total costs will decline by $212,500 Molina Medical Supply Company is trying to decide whether or not to continue distributing hospital supplies. The following information is available for Molina's business segments. Assume that all direct fixed costs could be avoided if a segment is dropped and that the total common fixed costs would remain unchanged if a segment is dropped. Hospital Supplies retail Stores Mail Order Sales $120,000 $440,000 $360,000 Variable Costs 64,000 200,000 140,000 Contribution Margin 56,000 240,000 220,000 Direct Fixed Costs 50,000 80,000 90,000 Allocated Common Fixed Costs 20,000 70,000 60,000 Net Income $14,000 $90,000 $70,000 Assume that if hospital supplies were dropped, retail store sales would increase by 25%. What would the impact of the increase in retail store sales have on overall profitability (compute the effect on retail sales only)? A B Income would increase by $105,000 Income would increase by $22,500 C D Income would increase by $40,000 Income would increase by $60,000 Hale Company makes sets of wrenches. They are trying to decide whether to continue to make the case the wrenches are sold in, or to outsource it to another company. The direct material and direct labor cost to produce the cases total $2.00 per case. The overhead cost is $1.00 per case which consists of $0.40 in variable overhead which would all be eliminated if the case were bought from the outside supplier. The $0.60 of fixed overhead is based on expected production of 200,000 cases per year and consists of the salary of the case production manager of $40,000 per year and $80,000 in depreciation on equipment that would have no resale value. The manager would be laid off if the cases were bought externally. Additionally, if the case production were stopped, the space that it is using could be rented out for $20,000 per year. The outside supplier has offered to supply the cases for $2.80 per case. How much will Alan save or lose if the cases are bought externally? A B C D Save $0.40 per case Lose $0.20 per case Lose $0.80 per case Save $0.20 per case
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