The Johnny Pickles Brewing Company has been successful as a small craft microbrewery with a focus on distributing its products to bars and restaurants. They are considering a bottling line that will allow them to start distributing to grocery and party stores. The equipment will cost $80,286 to purchase. It's expected that additional sales will be $26,186 per year while variable expenses are expected to increase $4,023 annually. The equipment is expected to last 5 years and will need a one time overhaul in year 3 that will cost $8,158. It will have no salvage value at the end of its useful life. The Johnny Pickles Brewing Company uses a discount rate of 12% when deciding to accept a project. What is the net present value of the project? Round your answer to the whole dollar. If the NPV is negative, enter as a negative. If it's positive, enter as a positive.
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- View Policies Show Attempt History Current Attempt in Progress Your answer is incorrect. Cullumber's Candles will be producing a new line of dripless candles in the coming years and has the choice of producing the candles in a large factory with a small number of workers or a small factory with a large number of workers. Each candle will be sold for $10. If the large factory is chosen, the cost per unit to produce each candle will be $3.60. The cost per unit will be $7.50 in the small factory. The large factory would have fixed cash costs of $2.30 million and a depreciation expense of $300,000 per year, while those expenses would be $470,000 and $100,000, respectively, in the small factory. Calculate the pretax operating cash flow break-even point for both factory choices for Cullumber's Candles. (Round answers to nearest whole units e.g. 152.) pretax operating cash flow breakeven point for the large factory is units and for the small factory is eTextbook and Media Save for Later Last…View Policies Current Attempt in Progress pport Werth Company produces tie racks. Its estimated fixed costs for the year are $288,000, and the estimated variable costs per unit are $14. Werth expects to produce and sell 60,000 racks at a price of $20 per unit. How many units will be sold at breakeven? D48,000. O 20,571. 3,600. O 14,400.Structuring a Special-Order Problem The Millenium Company has been approached by a new customer with an offer to purchase 10,000 units of its model F80 at a price of $4.10 each. The new customer is geographically separated from the company's other customers, and existing sales would not be affected. Millenium normally produces 75,000 units of F80 per year but only plans to produce and sell 60,000 in the coming year. The normal sales price is $12 per unit. Unit cost information for the normal level of activity is as follows: Direct materials $1.75 Direct labor 2.50 Variable overhead 1.50 Fixed overhead 3.25 Total $9.00 Fixed overhead will not be affected by whether or not the special order is accepted. Required: 1. Should the company accept or reject the special order? 2. By how much will operating income increase or decrease if the order is accepted? by
- r Problem 4 A fashion label is considering inclusive sizing which would expand its offerings to plus size and petite clothing. It estimates that a move to inclusive sizing would have an initial cost of $650,000 and would require an additional annual investment $55,000 per year. If each piece of inclusively sized clothing sold generates on average $27.9 of revenue, a. What is the minimum number of pieces of inclusive sized clothing would the fashion label need to sell per year to break even in 7 years assuming their MARR is 7.9%? b. The fashion retail is also less certain about the annual costs and hires an operations manager who predicts that the annual costs is either $55,000, $25,000 or $120,000 with associated probabilities of 0.6, 0.3 and 0.1 respectively. If the selling price of clothing remains same what is the expected value of the break-even point, in terms of the sale volume? (In other words, what is the expected number of pieces of inclusive sized clothing that the fashion…Instructions Wagner Chocolates makes a variety of chocolate candies. They are considering adding cupcakes to their menu of sweet treats. Because they are already producing at capacity, the company would need to add space and equipment. There is suitable bakery space available for rent adjacent to their current production facility. The rent would be $1,000 per month (fixed.) Wagner would also need to add ovens and other equipment at a cost of 42,000. This equipment is expected to have a useful life of four years, and for purposes of this analysis, 4 years is also the life of the project. Wagner expects the salvage value of the equipment to be zero at the end of four years. Each cupcake will sell for $2.50. Variable costs (DM, DL VFO) are expected to be $1.58 per cupcake. Wagner anticipates selling nine dozen cupcakes per day, 5 days a week, 52 weeks per year. Wagner requires a minimum rate of return on investment of 8%. 1. Create an Excel spreadsheet and enter all of the given…Question 1 LUMU has demand for 1400 water pumps each year. The cost of a water pump to LUMU is $400. Inventory carrying cost is estimated to be 20% of the unit cost and the ordering cost is $25 per order. If the owner orders in quantities of 300 or more, he can get a 5% discount on the pumps, Should LUMU accepts the quantity discount?
- Calculating a Target Cost RU Listening manufactures cell phones and is developing a new model with a feature (targeted at parents of teens) that prevents the phone from dialing an owner-defined list of phone numbers between the hours of midnight and 6:00 a.m. The new phone model has a target price of $370. Management requires a 10% profit on new product revenues. Required: If required, round to the nearest dollar. 1. Calculate the amount of desired profit.$fill in the blank 1 2. Calculate the target cost.$fill in the blank 2Question 4 of 9 - /0.75 !! View Policies Current Attempt in Progress Ivanhoe's Candles will be producing a new line of dripless candles in the coming years and has the choice of producing the candles in a large factory with a small number of workers or a small factory with a large number of workers. Each candle will be sold for $10. If the large factory is chosen, the cost per unit to produce each candle will be $3.00. The cost per unit will be $7.50 in the small actory. The large factory would have fixed cash costs of $1.8 million and a depreciation expense of $300,000 per year, while those expenses would be $490,000 and $100,000, respectively in the small factory. Calculate the accounting operating profit break-even point for both factory choices for Ivanhoe's Candles. (Round answers to nearest whole units, e.g. 152.) The accounting break-even point for large factory is units and for small factory is eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer APR tvProfitability Analysis Razerian makes production for audio. A total of 500 hours in January 2021 is available per month in this operation beause they face COVID 19, so they must decrease their productive hours. Data concerning the company’s four products appear below: Headphone Earbuds Speaker bluetooth Home teather Monthly demand in units 80 120 100 140 Hours required in operation per unit 0.6 1.8 0.4 2.5 Unit contribution margin $12 $36 $8 $50 Variable expenses $8 $20 $5 $30 No fixed costs could be avoided by modifying how many units are produced of any product or even by dropping any one of the products. Within this month, calculate the contribution margin and what should Razerian do if they want to get optimum margin? Suppose that you’re Razerian’s Business Director, what should you take place to get the optimum sales revenue?
- Current Attempt in Progress It costs Oriole Company $28 of variable costs and $14 of allocated fixed costs to produce an industrial trash can that sells for $88. A buyer in Mexico offers to purchase 3500 units at $34 each. Oriole Company has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income? O Decrease $28000 O Increase $21000 O Increase $119000 O Increase $28000 Save for Later Attempts: 0 of 1 used Submit AnswerHomework Saved Help Gibson Company makes a product that sells for $33 per unit. The company pays $16 per unit for the variable costs of the product and incurs annual fixed costs of $137,700. Gibson expects to sell 21,100 units of product. Required Determine Gibson's margin of safety expressed as a percentage. (Round your percentage answers to 2 decimal places (i.e., 0.2345 should be entered as 23.45).) Margin of safety %Parsa Real Estate Parsa Real Estate is a company that buys and rents real estate. The company is looking into buying an office building for $1M. The building has 10,000 square feet of rentable office space. The company analysts predict that they can rent the office space for $6 per square foot per month, but demand is a function of price in the following way: % Occupied = 2 - 0.2*Rent (Rent is in dollars per square foot per month. Also, at $6.00, Oscar thinks he can fill about 80% of the office space.) The building needs to be maintained (security, insurance, maintenance, etc.), which costs $10,000 per month regardless of occupancy. Also, there is a variable cost of $2 per month for each square foot occupied. A)What is the ROIC? (Please give your answer in decimal form. For example, 0.25 for 25%) B) What would be the new ROIC be if Parsa Real Estate decides to charge rent of $8.00 per square foot per month? (Please give your answer in decimal form. For example, 0.25 for 25%)