6-17 A rough rule of thumb for the chemical industry is that $1 of annual sales requires $2 of fixed- capital investment In a chemical processing plant where this rule applies, the total capital investment is $2,500,000, and the working capital is 20 percent of the total capital investment. | The annual total product cost amounts to $1,500,000. If the income tax rates on gross earnings total 35 percent, determine the following: a. Percent of total capital investment returned annually as gross earnings b. Percent of total capital investment returned annually as net profit
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- 1.During a year of operation, a firm collects $5,000,000 (TR) in revenue and spends $3,500,000 (EXPLICIT) on labor expense, raw materials, rent, and utilities. The firm’s owner has provided $1,000,000 of her own money instead of investing the money and earning a 12 percent annual rate of return. Show your work. a. The explicit costs of the firm are $_________. The implicit costs are $_________. Total economic cost is $__________. b. The firm earns accounting profit of $________. The firm’s economic profit is $_________.16 - What is the amount of capital that is not needed to realize the current level of production called?A) full capacityB) Missing CapacityC) Idle CapitalD) Idle LaborE) Excess capital4. A manufacturing company leases for $100,000 per yr a building that houses its manufacturing facilities. In addition the machinery in the building is being paid for installments of $20,000 per year. Each unit of product produced costs $15 in labor and $10 in materials and can be sold for $50. a) How many units per year must be sold for the company to break even? b) If the selling price is lowered to $45 per unit how many units must be sold each year for the company to earn a profit of S80,000 per year?
- Economics Francine, Albert, George and Connie each contributed $3,000 to a spousal RRSP. Which of them will have to report taxable income? 47 O a) Francine, whose spouse, Vic, transferred $3,000 from the spousal RRSP directly to an annuity in his name, The annuity cannot be commuted for three years. O b) Albert, whose spouse left him for another man and withdrew $3,000 from the spousal RRSP the year after it was deposited. O c) Connie, who is now a resident of Greece. Her spouse also is a resident of Greece and he withdrew $3,000 from the RRSP. O d) George, whose common-law partner, Annette, withdrew $1,000 from the spousal RRSP In the following year to purchase a new dishwasher for their house.2- A rough rule of thumb for the chemical industry is that OMR 1 of annual sales required OMR 2 of fixed capital investment. In a chemical processing plant where this rule applies, the total capital investment is OMR 3200000 and the working capital is 18% of the total capital investment. The annual net total product cost amounts to 1500000 OMR. If the income tax rates on gross earnings total 21%, determine the following: (a) Percent of total capital investment returned annually as gross earning. (b) Percent of total capital investment returned annually as net profit.Economics QUESTION 4 An asset with initial cost base of 6 million was bought 5 years ago. At the end of the current year (fifth year) the asset is sold by 1.1 million. The asset belongs to the 7 years MACRS property class. Knowing that the gains(loss) tax rate is 40%, what is the net proceeds resulted from selling this asset? $897,400 2,044,012 978,700 O 2,371,600
- SSSSS 1. Refer to Table below. Mr. AI-Maashani owns high end wedding cake baking business in Salalah. He leases/rents 4 high tech computer-controlled cake baking machines, for which he pays RO125 per day. He cannot increase the number of machines he leases/rents. He can hire as many workers as he wants at a cost of R075 per day per worker. These are the only two inputs (cake baking machines and labour) he uses in his cake baking business. Use this information to fill in the columns in the above table. Table: Mr. Al-Maashani wedding cake baking business cost structure Number of Number of cakes Fixed workers Variable Total per day Average total cost Marginal cost(wage re cost cost cost 125 200 275 1375 350 425 106 25 500 4253 10 200 75 116.66 75 75 125 75 25 125 150 3. 45 125 225 125 4. 60 800 125 70 375 1-004. If the project's cost of capital is 12%, what is the NPV of the project? $ 209,845 I'm still trying to figure out this last part. The homework says this is wrong, but I cannot follow your work to see if there is just an error in the decimals. Please explain how you got this last part.3. Sam works for Engineering Enterprises, and he is trying to analyze his cash flow throughout the following time period: Cash flows in year 1 -4 have been at a steady $1M/year. However due to the COVID pandemic in year 5 the company had to completely shut down its operations for a year. In year 6 the company was able to maintain the revenue of $1M, however there was a 15% decline in sales in the following periods. a) Draw the cash flow diagram b) Based on PW analysis and an interest rate of 5%, overall, how did the company perform during the 8-year study period? c) Convert your answer to AW based on your answer from part b)
- Siam Manufacturing has implemented several programs to improve its productivity. President and producer of Thai tea instant, has been able, with his current equipment, to produce 12,500 units this year and 10,500 units for last year. In this year, their product requires 13,200 labor hours, utilities of S8,250, and capital of $88,000 to process. For last year, their product requires 12,000 labor hours, utilities of $7,600, and capital of $83,000 to process. They have asked you to evaluate the firm's productivity by comparing this year's performance with last year's. Last year This YearOutput 10,500 units 12,500 unitsLabor hours 12,000 13,2000Utilities $7,600 $8,250Capital $83,000 $88,000what is the multi-factor percent change this year vs last year2. For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases. Not all graph have to be used and a graph can be used more than once. Graph 1 Graph 2 Graph 3 ° Activity Base O Activity Base o Activity Base Graph 4 Graph 5 O Activity Base O Activity Base FIGURE 20.2 Rent of warehouse of $10,000 per month Per-unit straight line depreciation costs a. b. с. Per-unit cost of direct materials d. Electricity costs of $5,000 per month plus $.0004 per kilawatt-hour е. Total direct labor costThe board of your company discusses a possible future price increase of 20% for one of the products. The argument against the increase is a decrease in sales due to the increased price. With how many units (pieces), sales can fall, without changing the total gross margin, with the following data for your company.Current sales price per piece SEK 600Variable costs per piece SEK 450Current sales volume 10,000 pieces