Matt Simpson owns and operates Quality Craft Rentals, which offers canoe rentals and shuttle service on...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Matt Simpson owns and operates Quality Craft Rentals, which offers canoe rentals and shuttle service on the Nantahala River. Customers can rent canoes at one station, enter the river there, and exit at one of two designated locations to catch a shuttle that returns them to their vehicles at the station they entered. Following are the costs involved in providing this service each year: Fixed Costs Variable. Costs $9.00 $ 3,100 Canoe maintenance Licenses and permits. 3,800 0 Vehicle leases 6,200 0 7,720 0 Station lease Advertising 6,800 7.00 Operating costs 21,800 7.00 Quality Craft Rentals began business with a $27,000 expenditure for a fleet of 30 canoes. These are expected to last 10 more years, at which time a new fleet must be purchased. Rentals have been stable at about 6,800 per year. Required: Matt is happy with the steady rental average of 6,800 per year. For this number of rentals, what price should he charge per rental for the business to make an annual 16% before-tax return on assets using life-cycle costs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price per rental Matt Simpson owns and operates Quality Craft Rentals, which offers canoe rentals and shuttle service on the Nantahala River. Customers can rent canoes at one station, enter the river there, and exit at one of two designated locations to catch a shuttle that returns them to their vehicles at the station they entered. Following are the costs involved in providing this service each year: Fixed Costs Variable. Costs $9.00 $ 3,100 Canoe maintenance Licenses and permits. 3,800 0 Vehicle leases 6,200 0 7,720 0 Station lease Advertising 6,800 7.00 Operating costs 21,800 7.00 Quality Craft Rentals began business with a $27,000 expenditure for a fleet of 30 canoes. These are expected to last 10 more years, at which time a new fleet must be purchased. Rentals have been stable at about 6,800 per year. Required: Matt is happy with the steady rental average of 6,800 per year. For this number of rentals, what price should he charge per rental for the business to make an annual 16% before-tax return on assets using life-cycle costs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price per rental
Expert Answer:
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
Matt Simpson owns and operates Quality Craft Rentals, which offers canoe rentals and shuttle service on the Nantahala River. Customers can rent canoes at one station, enter the river there, and exit...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
A company operates a standard absorption costing system and absorbs fixed production overheads based on machine hours. The budgeted fixed production overheads for the company for the previous year...
-
Ace Leasing acquires equipment and leases it to customers under long-term direct financing leases. Ace earns interest under these arrangements at a 6% annual rate. Ace leased a machine it purchased...
-
Describe two possible page formats. What are the trade-offs between them?
-
Refer to the data given for the Sky Company in Problem P12-4A. Required a. Calculate the change in cash that occurred in 2019. b. Prepare a statement of cash flows using the direct method. Use one...
-
Borrachero Company has two fringe benefit plans for its employees: 1. It grants employees 2 days vacation for each month worked. Ten employees worked the entire month of March at an average daily...
-
During its first year of operations, Splish Brothers Inc. had these transactions pertaining to its common stock. Issued 41.500 shares for cash at $6 per share. 1 Issued 71,500 shares for cash at $9...
-
Make a list of assumptions that will be used as the basis for planning the wedding. And no, it is not acceptable to assume that Tony and Peggy Sue will just elope, no matter how tempting that may be!...
-
Let f(x, y, z) be a smooth function of three variables. Let g(u, v) = f(ut, uv, v4). Let P = (1,-1, 1). Given Vf(P) = (-7,5, 2), find g, (-1, 1). Answer: (Enter an integer)
-
Solve for x, where M is molar and s is seconds. x = (6.3 103 M-2 s1)(0.38 M) Enter the answer. Include units. Use the exponent key above the answer box to indicate any exponent on your units. View...
-
Company A will pay no dividen for its stock over 5 years. The company then will pay $7 per share in year 6 and then increase dividend 8% per year thereafter. If the required return rate is 11%, what...
-
On January 1, Year 4, Dean purchased all of Kay's $10 par, voting common stock for $600,000. On that date, the fair values of Kay's assets and liabilities equaled their carrying amounts of $660,000...
-
Simplify. w w +7w+12 6w-96
-
Following are the draft balance sheets (summarized) of Delta Limited (DL), a listed company, and its subsidiaries Gamma Limited (GL) and Sigma Limited (SL) as at 31 December 2013: Non-current assets...
-
Minute Paper #9: (7.3 & 7.4) BUT which formula to use? I=PRT (4 in 1) S = P(1 + RT) S = P+I P= S (1 + RT) 1What was the original deposit into a bank account if there was $13,446.00 in the account...
-
Maria Castigliani is head of the purchasing department of Ambrosiana Merceti, a medium-sized construction company. One morning she walked into the office and said, The main problem in this office is...
-
Software Solution (SOS) helps subscribers solve software problems. All transactions are made over the telephone. For the year 2009, 10 engineers, most of whom are recent graduates, handled 100,000...
-
What is the R100 sales mix variance? CompuWorld sells two products, R66 and R100, and calculates sales variances using contribution margin. Pertinent data for the current year follow: a. $20,000F b....
-
South Atlantic Pulp Company processes wood pulp for manufacturing various paper products. The company employs a process costing system for its manufacturing operations. All direct materials are added...
-
Why do firms advertise?
-
Is advertising good or bad from societys perspective?
-
Why is it so important for monopolistically competitive firms to advertise?
Study smarter with the SolutionInn App