Home Properties is developing a subdivision that includes 410 home lots. The 180 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 230 lots in the Hilltop section offer unobstructed views. The expected selling price for each Canyon lot is $47,000 and for each Hilltop lot is $96,000. The developer acquired the land for $2,400,000 and spent another $1,200,000 on street and utilities improvements. Assign the joint land and improvement costs of $3,600,000 to the Canyon section and the Hilltop section using the value basis of allocation. Note: Do not round your intermediate calculations. Canyon section Hilltop section Totals Sales Value Numerator Percent of Sales Value Denominator % of Sales Value 0 0 0 Cost to Allocate Allocated Cost
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- Exercise 22-22A (Algo) Assigning joint costs LO C2 Home Properties is developing a subdivision that includes 420 home lots. The 240 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 180 lots in the Hilltop section offer unobstructed views. The expected selling price for each Canyon lot is $54,000 and for each Hilltop lot is $92,000. The developer acquired the land for $2,000,000 and spent another $2,400,000 on street and utilities improvements. Assign the joint land and improvement costs of $4,400,000 to the Canyon section and the Hilltop section using the value basis of allocation. (Do not round your intermediate calculations.) Canyon section Hilltop section Totals Sales Value Numerator Percent of Sales Value Denominator % of Sales Value 0 0 0 Cost to Allocate Allocated Cost Quantity of LotsProblem 6-16 Comparing Mutually Exclusive Projects Tanaka Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $295,000, has a 4-year life, and requires $97,000 in pretax annual operating costs. System B costs $375,000, has a 6-year life, and requires $91,000 in pretax annual operating costs. Both systems are to be depreciated straight- line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 21 percent and the discount rate is 9 percent. Calculate the EAC for both conveyor belt systems. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) System A System B Which conveyor belt system should the firm choose? O System A O System Bföllowing Cost Factor Site B 170,000$ Site A Price of land 100,000S Monthly cost of delivering materials S 10,000 $ 7,000 Cost of equipment setup $ 12,000 $ 9,000 Cost of utilities per month $ 1,500 1,100 For site A, an extra $ 60/ day is needed for additional site guards. a- Which site should the contractor select? b- When do the costs of two sites are equals (After how many months of work the costs are similar)?
- Q16 Red Company allocates research and development costs to its three research facilities based on each facility's total annual revenue from new product developments: Facility location Kentucky Arizona Illinois Total New product revenue $ 66,000,000 $ 80,000,000 $ 104,000,000 $ 250,000,000 Research & Development $ 40,000,000 Using revenue as an allocation base, the amount of costs allocated to the Arizona research facility is calculated to be: Multiple Choice $15,872,000. $22,528,000. $37,500,000. $12,800,000. $9,728,000.Should WMM lease or construct their own production facility Option 1: Construct Costs to incur: Actual expenditure towards buying land, construct building and getting ready for use $ 500,000Taxes, insurance, and repairs (per year) $ 20,000Intended years of use 18Projected market value in 18 years $ 1,000,000 Budgeted maximum expenditure towards buying land, construction of building and getting ready for use. $ 500,000Remainder in four payments of; $ 175,000Option 2: LeaseIntended years of use 18First lease payment due now $ 100,000Rest of the lease payments…Question 45 Assume a division of HP Inc currently makes 50,000 circuit boards per year used in producing diagnostic electronic instruments at the cost of 150 per board, considering of variable costs per unit of $35 and feed costs per unit of $15. Further, assume Sarmina Corporation offers to sell HP the 50.000 circuit boards for $50 each if HP accepts this offer the facilities currently used to make the boards could be rented to one of HP's suppliers for $75,000 per year. In addition, $8 per unit of the fixed overhead applied to the circuit boards would be totally eliminated. Should HP outsource this component from Sanmina Corporation Support your answer with relevant cost calculations. Make-or-Buy) Decision.
- Problem 2: Alternatives for constructing a new facility which are mutually exclusive are being considered. The annual equivalènt costs and estimated benefits of the alternatives are as follows: Alternative Cost Benefits $1,050,000 $900,000 $1,230,000 $1,350,000 $990,000 $1,110,000 $810,000 $1,390,000 $1,500,000 $1,140,000 A C D E Using the B-C ratio, which alternative, if any, should be adopted for investment?Objective: Should WAW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 230,000Taxes, insurance, and repairs (per year)$ 30,000Intended years of use20Projected market value in 20 years$ 1,600,000Maximum down payment WAW can make$ 500,000Remainder in four payments of;$ 180,000Option 2: LeaseIntended years of use20First lease payment due now$ 100,000Rest of the lease payments (years 2-20)$ 90,000Operating costs to be paid by WAWRepairs (annual)$ 7,000Maintenance (annual)$ 25,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the preferred option (construction or leasing).Scenario 2: Bremily Firewood Company is expanding their operations. The company has an expansion budget of $1,000,000 to use for contracting with local land owners. The company can contract with one, multiple, or zero local land owners. Assume the company has a MARR of 10% per year. 2C. Use the following information to determine which land parcels Bremily should contract with. Assume there is only one of each land parcel available and each parcel has an expected life of 6 years. Land Parcel Initial Owner Net Present Value Cost Peterson $564,000 $473,000 Johnson $475,000 $351,000 Smith $268,000 $194,000 Jefferson $832,000 $609,000 What is the best land parcel, or combination of land parcels, for Bremily Company to contract with? Note: Enter you answer as the number of each parcel (0 or 1) the company should choose.
- Required information Problem 03.036 DEPENDENT MULTI-PART PROBLEM - ASSIGN ALL PARTS A process for producing the mosquito repellant Deet has an initial investment of $205,000 with annual costs of $55,000. Income is expected to be $90,000 per year. Problem 13.036.b: Calculate the breakeven point What is the annual breakeven production quantity for both payback periods if net profit, that is, income minus cost, is $10 per gallon? When i=0%, the annual breakeven production quantity is determined to be 3504 gallons per year. When 12%, the annual breakeven production quantity is determined to be 1914 gallons per year.11. Problem 10-08 (NPVS, IRRS, and MIRRs for Independent Projects) eBook NPVS, IRRS, and MIRRS for Independent Projects Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley system, in this year's capital budget. The projects are independent. The cash outlay for the truck is $17,100, and that for the pulley system is $22,430. The firm's cost of capital is 14%. After-tax cash flows, including depreciation, are as follows: Year Truck Pulley $7,500 1 $5,100 2 5,100 7,500 3 5,100 7,500 4 5,100 7,500 5 5,100 7,500 Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places. Use a minus sign to enter negative values, if any. Pulley IRR NPV MIRR $ Value Truck % % Decision -Select- C -Select- -Select- $ Value % % - Decision -Select- -Select- -Select-CPractice Question Solved: 7 Highest and Best Use (HBU) Analysis Imagine you are trying to determine HBU and the subject property has 3 different uses: Industrial. Retail and Office The ideal improvement for a small industrial complex is 100.000 saft and it would cost to build $12.500.000. The buildina's cap rate is 7.5%, the vacancy rate in this market for this type of property is 4% and the operating expenses The ideal improvement for a small retail complex is 20,000 sqft and it would cost to build $2,500,000. The building's cap rate is 6.5%, the vacancy rate in this market for this type of property is 5% and the operating expenses include The ideal improvement for a small office building is 15,000 saft and it would cost to build $3.500.000. The buildina's cap rate is 8.0%, the vacancy rate in this market for this type of property is 10% and the operating expenses includ Consider that the lot is vacant and the cap rate for land is the same independent of the use. Current market…