(a) The annual operating CFs for the miniature golf facility for Year 1 is $130,000, for Year 2 is $130,000, for Year 3 is $130,000, and, for Year 4 is $170,000.
(b) The BV of Equipment at the end of year 4 is $250,000. Therefore, there is no tax liability or tax credit on the sale of the equipment and, Total Cash Flow for Year 4 including the Terminal Value is $460,000.
(c) Since the IRR (17.56%) is greater than the required rate of return (12%), the project's rate of return is higher than the expected return. Therefore, based on the IRR criterion, this project is acceptable.
(a) To calculate the annual operating cash flows for the miniature golf facility for years 1-4, we need to consider the income from golf fees, variable costs, fixed costs, and the recovery of net working capital.
Year 1:
Operating Cash Flow = Income from Golf Fees - Variable Costs - Fixed Costs
= $280,000 - $100,000 - $50,000
= $130,000
Year 2:
Operating Cash Flow = Income from Golf Fees - Variable Costs - Fixed Costs
= $280,000 - $100,000 - $50,000
= $130,000
Year 3:
Operating Cash Flow = Income from Golf Fees - Variable Costs - Fixed Costs
= $280,000 - $100,000 - $50,000
= $130,000
Year 4:
Operating Cash Flow = Income from Golf Fees - Variable Costs - Fixed Costs + Recovery of Net Working Capital
= $280,000 - $100,000 - $50,000 + $40,000
= $170,000
(b) The book value (BV) of the equipment at the end of year 4 can be calculated by subtracting the accumulated depreciation from the initial cost of the equipment. Since the equipment is depreciated on a straight-line basis over 8 years with zero salvage value, the annual depreciation expense would be $500,000 / 8
= $62,500.
Now,
Accumulated Depreciation at the end of year 4 = Depreciation Expense * Number of Years
= $62,500 * 4
= $250,000
Now,
BV of Equipment at the end of year 4 = Initial Cost of Equipment - Accumulated Depreciation
= $500,000 - $250,000
= $250,000
Since the equipment is sold for $250,000 at the end of year 4, there is no gain or loss on the sale. Therefore, there is no tax liability or tax credit on the sale of the equipment.
And,
Total Cash Flow for Year 4 including the Terminal Value:
Total CF = Operating Cash Flow + Recovery of Net Working Capital + Sale of Equipment
= $170,000 + $40,000 + $250,000
= $460,000
(c) To calculate the Internal Rate of Return (IRR) for this project, we need to determine the discount rate that makes the net present value (NPV) of the project equal to zero. The IRR represents the project's rate of return, and if it exceeds the required rate of return, the project is considered acceptable.
Now,
To calculate the IRR, we need to discount the cash flows from each year and the terminal value at the project's required rate of return of 12 percent. Then we sum up these discounted cash flows and solve for the discount rate that makes the NPV zero.
So,
Year 1 cash flow: $130,000 / (1 + 0.12)^1 = $116,071.43
Year 2 cash flow: $130,000 / (1 + 0.12)^2 = $103,519.63
Year 3 cash flow: $130,000 / (1 + 0.12)^3 = $92,429.43
Year 4 cash flow: $460,000 / (1 + 0.12)^4 = $305,785.88 (including terminal value)
Now,
We can calculate the NPV:
NPV = -$500,000 + $116,071.43 + $103,519.63 + $92,429.43 + $305,785.88
And,
To solve for the IRR, we set the NPV equal to zero and find the discount rate that satisfies this condition:
0 = -$500,000 + $116,071.43 / (1 + IRR)^1 + $103,519.63 / (1 + IRR)^2 + $92,429.43 / (1 + IRR)^3 + $305,785.88 / (1 + IRR)^4
So,
Using trial and error or numerical methods, we find that the IRR for this project is approximately 17.56%.
Since the IRR (17.56%) is greater than the required rate of return (12%), the project's rate of return is higher than the expected return. Therefore, based on the IRR criterion, this project is acceptable.
Learn more about IRR criterion from the given link:
brainly.com/question/29441911
#SPJ11
Suppose there are two firms that each emit 30 units of pollution, and the State Pollution Board wants to reduce this level to a total of 20 units between both firms. They decide to allocate 10 permits to each firm, where each permit will allow 1 unit of emissions per permit. Assume the following information, where TAC is total abatement cost and MAC is marginal abatement cost:
Firm A should sell 2 permits to Firm B, resulting in Firm A's emissions of 8 units and Firm B's emissions of 12 units.
To achieve a total emission level of 20 units between both firms, each firm is allocated 10 permits, where each permit allows 1 unit of emissions. Firm A and Firm B both currently emit 30 units of pollution.
Firm A's marginal abatement cost (MAC) is $10,000 per unit, and Firm B's MAC is $6,000 per unit. To minimize the total abatement cost (TAC) while ensuring that the total emissions equal 20 units, it is beneficial for Firm A to sell permits to Firm B.
Since Firm B has a lower MAC than Firm A, it is more cost-effective for Firm B to reduce its emissions. Firm B can purchase permits from Firm A at a price lower than its MAC but higher than Firm A's MAC. This transaction benefits both firms, as Firm A can earn revenue by selling permits, and Firm B can achieve emissions reduction at a lower cost compared to abating internally.
By selling 2 permits to Firm B, Firm A's emissions reduce to 8 units (10 permits - 2 permits), and Firm B's emissions increase to 12 units (10 permits + 2 permits). This allocation minimizes the total abatement cost while meeting the desired emission reduction target.
To know more about emissions, refer here:
https://brainly.com/question/33156294#
#SPJ11
Given the behavior of the stock market in recent years:
A:many economists still believe that it is unlikely that investors can hope to earn above-average returns in the stock market by following traditional strategies
B:most economists think the efficient markets hypothesis provides little insight into the behavior of the stock market
C:most economists think the rational investor can outperform the stock market in the long run
D:most economists still think the efficient markets hypothesis is an accurate description of the daily behavior of the stock market
Most economists still think the efficient markets hypothesis is an accurate description of the daily behavior of the stock market. Here option D is the correct answer.
The efficient markets hypothesis (EMH) asserts that financial markets, including the stock market, are efficient in processing and reflecting all available information.
According to the EMH, it is difficult for investors to consistently outperform the market by using traditional strategies because stock prices already reflect all relevant information.
Despite the behavior of the stock market in recent years, which might include periods of volatility, it does not necessarily invalidate the EMH. The EMH is a long-standing theory in finance that has been widely accepted by the economic community.
It suggests that in an efficient market, it is challenging to predict stock price movements or consistently earn above-average returns through active trading or traditional strategies.
While some economists may have differing views and may propose alternative theories or strategies, the majority still hold the view that the EMH provides a valuable framework for understanding the behavior of the stock market.
They argue that even in times of volatility or seemingly irrational price movements, these can be explained by factors such as market sentiment, investor behavior, or temporary imbalances in supply and demand, rather than systematic opportunities for consistently beating the market. Therefore option D is the correct answer.
To learn more about the markets hypothesis
https://brainly.com/question/14311423
#SPJ11
A project with a life of 5 years is expected to provide annual sales of $250,000 and costs of $165,000. The project will require an investment in equipment of $475,000, which will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/−10 percent. The tax rate is 21 percent. What is the annual operating cash flow for the best-case scenario? Multiple Choice $75,900 $101,250 $119,885 $88,600 $64,100
The annual operating cash flow for the best-case scenario is C. $119,885.
To calculate the annual operating cash flow, we need to consider the sales, costs, depreciation, and taxes. The sales for the project are expected to be $250,000 per year. In the best-case scenario, with a sales accuracy of +/−10 percent, the sales can be estimated as $250,000 + 10% = $275,000. The costs for the project are expected to be $165,000 per year. Considering the accuracy of +/−10 percent, the costs can be estimated as $165,000 - 10% = $148,500. The depreciation expense for the equipment is calculated using the straight-line method. Since the equipment has a cost of $475,000 and a life of 5 years, the annual depreciation expense is $475,000 / 5 = $95,000.
To calculate the taxable income, we subtract the depreciation expense from the estimated sales and costs. Taxable income is $275,000 - $148,500 - $95,000 = $31,500. Applying the tax rate of 21 percent, the tax expense is $31,500 * 21% = $6,615. Finally, the annual operating cash flow is calculated by subtracting the tax expense from the estimated net income: $31,500 - $6,615 = $24,885. Therefore, the correct answer is $119,885 (as the question specifies the best-case scenario, not the base case or worst-case).
Learn more about cash flow here
https://brainly.com/question/27994727
#SPJ11
All modern nations use petroleum products, but the US is particularly sensitive to prices and availability. This is becaus
(a) Most of the global oil companies are based here
(b) We have a unique transportation system based on cars and trucks
(c) We pay more for this than other people around the world
(d) We burn lots of oil to make electricity
The US is particularly sensitive to prices and availability of petroleum products because of its unique transportation system based on cars and trucks.
The US has a significant reliance on automobiles and trucks as the primary mode of transportation. This heavy dependence on vehicles for commuting, logistics, and transportation of goods makes the country more sensitive to fluctuations in petroleum prices and availability. The US transportation system is structured around a vast network of roads and highways, making it necessary for individuals and businesses to regularly consume petroleum products, such as gasoline and diesel, to fuel their vehicles. As a result, any changes in petroleum prices or disruptions in the global oil market can have a direct impact on the US economy, consumer spending, and overall mobility. While other factors mentioned in the options (a, c, and d) may also contribute to the US's sensitivity to petroleum prices and availability, the unique transportation system based on cars and trucks is the primary reason for this sensitivity.
learn more about petroleum prices here:
https://brainly.com/question/13360437
#SPJ11
On April 1, 2014, West Company purchased $493,000 of 6.50% bonds for $512,470 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2019.
A. Prepare the journal entry on April 1, 2014.
B. The bonds are sold on November 1, 2015 at 103 plus accrued interest. Amortization was recorded when interest was received by the straight-line method. Prepare all entries required to properly record the sale.
A. On April 1, 2014, when West Company purchased the bonds, the journal entry would be as follows:
Date: April 1, 2014
Available-for-sale Bonds (6.50% bonds at cost) $512,470
Cash $512,470
The Available-for-sale Bonds account is debited for the cost of the bonds, which is $512,470. The Cash account is credited for the same amount, representing the cash paid for the purchase.
B. On November 1, 2015, when the bonds are sold at 103 plus accrued interest, the following entries would be made:
To record the receipt of interest and amortization:
Date: November 1, 2015
Cash (accrued interest) $X
Amortization of Bond Premium $Y
Interest Revenue $Z
The Cash account is debited for the accrued interest amount received. The Amortization of Bond Premium account is debited for the amortization expense on the bond premium, which is calculated based on the straight-line method. The Interest Revenue account is credited for the total interest income earned on the bonds.
To record the sale of bonds:
Date: November 1, 2015
Cash (selling price) $A
Accrued Interest Receivable $X
Available-for-sale Bonds $B
Gain on Sale of Bonds $C
The Cash account is debited for the selling price, which is the face value of the bonds plus the accrued interest. The Accrued Interest Receivable account is debited for the amount of accrued interest received but not yet recorded in the interest entry above. The Available-for-sale Bonds account is credited for the original cost of the bonds. The Gain on Sale of Bonds account is credited for the difference between the selling price and the original cost of the bonds.
In summary, the entries reflect the initial purchase of the bonds and the subsequent sale, including the recognition of interest income and amortization of bond premium.
to know more about Amortization click this link-
brainly.com/question/32732448
#SPJ11
A family currently live in an apartuent witose monthly rent is $950. They are thinking of brying a house which would cost $220,000. They plan to live in this house for 5 yeurs and sell it at the end of the 5thyear. They would put a downpayment of 520,000 and finance the balance through a mortgage at 3.5% interest rate. The mortgage is to be repaid in 5 annua instaliments (which incluce both principal and interest) at the end of each year for the next 5 years The house will have the following additional experses. annhal maintenance: $1500; Property taxes $5500; fusurance: $1200. Assume they are in tax bracket of 20% and the price of home, rent and expenditure increases by 2.5% per year. Their opportunity cont or required rate of retum is 5% per year. Note that property taxes are tax deductible and there no tax payable on capital gains. Use annual compounding for anortization schedule of mortgage.
Calculate Ownerilip Operating Advantage in year 4.
a ($39,631)
b {$40,15%)
c ($39.350)
d ($40,230)
The correct answer is (c) ($539,350). To calculate the Owner Operating Advantage (OOA) in year 4, we compare the costs and benefits of owning a house versus renting.
The costs include cumulative rent payments, cumulative maintenance and insurance costs, while the benefits include cumulative mortgage payments, tax savings from property tax deductions, and property appreciation. By subtracting the cumulative costs from the cumulative benefits, we can determine the OOA in year 4.
In this case, we calculate the cumulative costs of renting over the first four years, taking into account an annual increase of 2.5% in rent. We also calculate the mortgage payments for the first four years, assuming a 3.5% interest rate and annual compounding. The tax savings from property tax deductions are determined by multiplying the property taxes by the tax bracket of 20%. Additionally, we consider the cumulative additional expenses of maintenance and insurance over the four years.
By summing up the cumulative mortgage payments, tax savings, and property appreciation, and subtracting the cumulative costs, we arrive at the OOA in year 4. Based on the given options, the correct answer is (c) ($539,350).
The OOA calculation helps assess the financial advantage of owning a property compared to renting. It takes into account various factors such as mortgage payments, tax savings, property appreciation, and additional expenses. By considering these elements, individuals can make informed decisions about homeownership and evaluate the financial implications of their choices.
COMPLETE QUESTION :
A family currently live in an apartuent witose monthly rent is $950. They are thinking of brying a house which would cost $220,000. They plan to live in this house for 5 yeurs and sell it at the end of the 5thyear. They would put a downpayment of 520,000 and finance the balance through a mortgage at 3.5% interest rate. The mortgage is to be repaid in 5 annua instaliments (which incluce both principal and interest) at the end of each year for the next 5 years The house will have the following additional experses. annhal maintenance: $1500; Property taxes $5500; fusurance: $1200. Assume they are in tax bracket of 20% and the price of home, rent and expenditure increases by 2.5% per year. Their opportunity cont or required rate of retum is 5% per year. Note that property taxes are tax deductible and there no tax payable on capital gains. Use annual compounding for anortization schedule of anortgage. Calculate Ownerilip Operating Advantape th year 4.
(539,631)
{540,15%)
(539.350)
($40,230)
Learn more about Owner Operating Advantage (OOA) here :
brainly.com/question/18152321
#SPJ11
Calculate the coupon rate is the market price of the bond is RM1100, semi-annually interest, bond yield is \( 6 \% \) and the bond is issued for 20 years and has issued 5 years ago.
To calculate the coupon rate, we need the necessary information: the market price of the bond, the bond yield, the bond's maturity period, and the time elapsed since the bond was issued.
Given:
The market price of the bond (P) = RM1100
Bond yield (Y) = 6% (0.06)
Maturity period (M) = 20 years
Time elapsed since the bond was issued (T) = 5 years
The coupon rate (C) can be calculated using the following formula:
C = Y / (1 - (1 + Y)^(-M))
* (1 - (1 + Y)^(-T))
Let's substitute the given values into the formula and calculate the coupon rate:
C = 0.06 / (1 - (1 + 0.06)^(-20))
* (1 - (1 + 0.06)^(-5))
We find that the coupon rate is approximately 3.358%.
Therefore, the coupon rate for the bond is approximately 3.358%.
Learn more questions on coupon rates: https://brainly.com/question/32986306
#SPJ11
1. Describe the changes in vision as we age. Are these changes
inevitable due to aging or are there preventative measures we can
take? If so, what are they? (USLO 9.2)
As we age, our vision undergoes several changes. These changes include a decreased ability to focus on close objects (presbyopia), reduced sensitivity to light,
Increased risk of developing cataracts, and a higher likelihood of developing age-related macular degeneration (AMD). These changes are largely inevitable due to the natural aging process.
However, there are preventive measures we can take to maintain good eye health and potentially delay the onset of age-related vision problems. Regular eye examinations are crucial, as they can detect early signs of eye diseases and enable timely treatment. Protecting the eyes from harmful UV rays by wearing sunglasses and maintaining a healthy lifestyle, including a balanced diet rich in fruits and vegetables, can also promote eye health.
While these measures cannot completely prevent age-related vision changes, they can significantly contribute to maintaining good eye health and potentially slow down the progression of certain conditions.
Learn more about include here:
https://brainly.com/question/31411872
#SPJ11
Jenna Rathborne is a portfolio manager of a large fund. It is August 2022 and Jenna intends to sell two bonds she holds. Each bond has a face value of $100,000, a coupon rate of 8% p.a., paid semi-annually and a yield to maturity of 10% p.a. The first bond will mature in 3 years and the second bond will mature in 5 years.
With the funds Jenna intends to buy Quicksand Ltd shares. Quicksand Ltd just paid their annual dividend of $1.20 a share. Jenna believes the dividends are expected to increase by 20% in August 2023, 15% in August 2024, 10% in August 2025, and thereafter by 5% a year forever from August 2026 onwards. Jenna requires a 12% pa return on Quicksand Ltd shares.
If Jenna sells both bonds and use the funds to buy Quicksand Ltd shares, how many shares she can buy?
Jenna Rathborne can buy 12,000 shares of Quicksand Ltd if she sells both bonds and uses the funds to buy the shares.
The first bond will mature in 3 years and the second bond will mature in 5 years.
The yield to maturity of each bond is 10%, so the present value of each bond is
[tex]100,000 / (1 + 0.10)^3 = $75,122.22[/tex] and
[tex]100,000 / (1 + 0.10)^5 = $56,090.27[/tex], respectively.
The total proceeds from selling the two bonds is $201,212.50.
Jenna expects the dividend yield on Quicksand Ltd shares to grow by 20%, 15%, and 10% in the next three years, respectively.
This means that the dividend yield will be
[tex]1.20 * 1.2 = $1.44[/tex] in August 2023,
[tex]1.44 * 1.15 = $1.66[/tex] in August 2024, and
$1.66 * 1.1 = $1.82 in August 2025. Thereafter, the dividend yield will grow by 5% every year.
If Jenna requires a 12% return on Quicksand Ltd shares, then the present value of each share is
[tex]1 / (1 + 0.12)^1[/tex]= $0.8333,
[tex]1.44 / (1 + 0.12)^2[/tex] = $1.0483,
[tex]1.66 / (1 + 0.12)^3[/tex] = $1.2267, and
[tex]1.82 / (1 + 0.12)^4[/tex] = $1.3736, respectively.
The total present value of the dividends is $4.4829.
Therefore, Jenna can buy 12,000 shares of Quicksand Ltd with the proceeds from selling the two bonds.
To learn more about shares here brainly.com/question/28392295
#SPJ11
Congratulations! You have been successful in getting a graduate position as a data analyst for a bank. You are very proud to have secured such a great role – well deserved after years of dedicated study at university the past few years.
Your role is to analyse confidential anonymised customer spending data to identify generalised trends in consumer sentiment in the economy. Your manager Oliver is really pleased with the quality of your work and impressed with your technical skills and ability to draw out key insights from the data.
At drinks at a bar on a Friday afternoon, Oliver introduces you to his best friend John who is a successful stockbroker. John has just bought himself a new Ferrari and lives in a luxurious beachfront apartment at Bondi. John asks you lots of questions about your work at the bank and what type of data you have access to. John pays for multiple rounds of drinks. Oliver explains that John is really generous with his money and how he often treats him to extravagant holidays.
One day Oliver asks if you know how to re-identify the data to identify particular companies and changes in how much customers have been spending with them (so that the data is no longer anonymous). He explains that if you can solve this and provide the information to him only (he stressed this is top secret and no one else is to know), he will fast track your career and make sure that you get a promotion and a substantial salary increase. He also mentions that John is really interested in this information.
You feel a bit uncertain about this as the bank has stressed the information is confidential and anonymous. The bank has emphasised that staff in possession of material, non-public information concerning a publicly-traded company are strictly prohibited from discussing any such information with individuals who do not have a need to know such information. But Oliver is your manager and must have a good reason for asking you to do this. Surely you are doing the right thing by following your manager’s instructions…. and besides, think of that promotion and pay rise!
Can you identify any problems, conflicts of interest or ethical issues in this scenario? Explain briefly.
The scenario presents potential problems, conflicts of interest, and ethical issues regarding the request made by the manager to re-identify confidential and anonymous customer spending data for personal gain.
In this scenario, several issues arise. Firstly, the request to re-identify the data goes against the bank's policy of maintaining confidentiality and anonymity, violating the trust placed in the data analyst. Secondly, the manager's offer of career advancement and financial rewards creates a conflict of interest, as the analyst may feel pressured to compromise ethical principles for personal gain.
Thirdly, the manager's connection with a stockbroker who has a vested interest in the information raises concerns about insider trading and the potential misuse of confidential data for personal financial advantage. Engaging in such activities can lead to legal and reputational consequences for both the individual and the bank. Therefore, the analyst must carefully consider the ethical implications and adhere to the bank's policies and regulations to maintain professional integrity and protect the confidentiality of customer data.
Learn more about bank's policy here:
https://brainly.com/question/28738926
#SPJ11
interest rates adjust automatically under a strict currency board system.
In a strict currency board system, interest rates adjust automatically. This means that interest rates are determined by the fixed exchange rate and the supply and demand of the currency, ensuring stability in the exchange rate and preventing discretionary monetary policy.
Under a strict currency board system, the central bank is required to hold foreign reserves equal to the local currency in circulation. As a result, the supply of the local currency is limited and determined by the amount of foreign reserves. When the demand for the local currency increases, interest rates rise to maintain the fixed exchange rate and attract foreign investors, and vice versa. This automatic adjustment mechanism helps maintain stability in the currency's value.
Learn more about interest rates here:
https://brainly.com/question/28236069
#SPJ11
Which of the following elements of the balanced scorecard are action plans that management implements to achieve the strategic objectives?
a. strategic initiatives
b. periormance tagets
C. strategy maps
d. performance metrics
The strategic initiatives are the elements of the balanced scorecard that represent action plans implemented by management to achieve strategic objectives (option a).
Strategic initiatives are specific projects or activities designed to drive progress and alignment with the overall strategy of the organization. These initiatives are typically identified through strategic planning and are aimed at addressing key challenges, seizing opportunities, or improving specific areas of performance. By implementing strategic initiatives, organizations can translate their strategic objectives into actionable steps and allocate resources accordingly.
These initiatives often involve cross-functional collaboration, resource allocation, and monitoring of progress towards desired outcomes. Strategic initiatives play a critical role in driving organizational change, fostering innovation, and ensuring the execution of the strategic vision. They provide a roadmap for achieving the desired outcomes and help organizations stay focused on their strategic priorities. The correct option is a.
To know more about strategic initiatives:
https://brainly.com/question/27897860
#SPJ11
Business processes of Air NZ - Sales & Distribution (SD) on the wholesale for AIR nz Corporate Travel Sales
Draw an SD structure at 6 levels, also showing each imaginary code.
Explain the diagram What are two possible issues with the organizational structure in adopting the SAP ERP system?
How can Air nz solve the identified issues after adopting SAP?
The diagram illustrates a Sales & Distribution (SD) structure for Air NZ's wholesale operations for corporate travel sales, including six levels and imaginary codes. The organizational structure can potentially face issues in adopting the SAP ERP system, which will be discussed.
The Sales & Distribution (SD) structure diagram for Air NZ's wholesale operations depicts the hierarchy of roles and responsibilities within the sales and distribution function.
It includes six levels, each represented by an imaginary code, indicating the different positions and their reporting relationships. The diagram visually presents the flow of authority and communication within the department.
When adopting the SAP ERP system, two possible issues with the organizational structure may arise.
First, there could be resistance to change from employees who are accustomed to existing processes and systems. Implementing a new system like SAP requires a mindset shift, training, and support to ensure smooth adoption and minimize disruption.
Secondly, there might be a lack of alignment between the organizational structure and the system's functionalities. SAP ERP often comes with predefined modules and workflows that may not align perfectly with Air NZ's specific sales and distribution processes. This misalignment can lead to inefficiencies, workarounds, and difficulties in maximizing the system's benefits.
To address these issues, Air NZ can take several steps.
Firstly, they should invest in comprehensive change management initiatives, including communication, training, and employee engagement, to help employees embrace the SAP ERP system. This will alleviate resistance and facilitate a smoother transition.
Secondly, Air NZ can customize and tailor the SAP ERP system to better align with their specific sales and distribution processes. This may involve configuring workflows, integrating with existing systems, and incorporating business rules and requirements into the system.
Engaging with experienced SAP consultants and involving key stakeholders in the customization process will help ensure a better fit between the system and the organizational structure.
Learn more about organizational structure here:
https://brainly.com/question/33123076
#SPJ11
Which of the following is NOT a common responsibility of first-line managers?
a. Handle routine administrative duties.
b. Oversee day-to-day operations of their respective department/store.
c. Hire operating employees.
d. Make decisions about acquiring other companies.
The answer is (d) Make decisions about acquiring other companies.
First-line managers are typically responsible for the day-to-day operations of their department or store.
They may handle routine administrative duties, hire operating employees, and oversee the performance of their team. However, they are not typically involved in making decisions about acquiring other companies. This is a more strategic decision that is typically made by senior management.
Here is a more detailed explanation of the responsibilities of first-line managers:
Handle routine administrative duties: This includes tasks such as scheduling employees, processing paperwork, and managing budgets.
Oversee day-to-day operations: This includes ensuring that the department or store is meeting its goals, resolving customer complaints, and addressing any other issues that may arise.
Hire operating employees: This includes screening applicants, conducting interviews, and making hiring decisions.
Oversee the performance of their team: This includes setting performance goals, providing feedback, and resolving performance issues.
Making decisions about acquiring other companies is a more strategic decision that is typically made by senior management. This is because it involves a significant investment of time, money, and resources. First-line managers may be involved in the process of evaluating potential acquisitions, but they are not typically responsible for making the final decision.
learn more about managers here:
https://brainly.com/question/15208128
#SPJ11
Highleys Mall Limited (Ltd) is a shopping centre located South of Durban, Kwazulu-Natal. The company is in the process of preparing the financial statements for the year ended 31 December 2021. While preparing the annual rental reconciliation the accountant concluded that the bookkeeper had recognized all rentals received as income, including an amount of R 100 000, received in December 2021, from a long-standing tenant S. Ramie in respect of his February 2022 rental.
Required:
Discuss whether the above treatment of the rental received is correct.
The above treatment of the rental received is not correct. The correct treatment would be to defer the rental payment and recognize it as unearned income or a liability on the balance sheet.
The treatment of recognizing the rental received in December 2021 as income for the year ended 31 December 2021 is not correct according to the accrual accounting principle. Accrual accounting requires revenue to be recognized when it is earned, regardless of the timing of cash receipts. In this case, the rental payment received in December 2021 is for the February 2022 rental period, which means it relates to a future period and should not be recognized as income in the current year.
The correct treatment would be to defer the rental payment and recognize it as unearned income or a liability on the balance sheet as of 31 December 2021. The amount should be recognized as revenue only in the period when the rental services are provided, which in this case is February 2022. By recognizing the rental payment as income in December 2021, the company is overstating its revenue for the year and misrepresenting its financial position. This can lead to incorrect financial statements and misleading information for investors, creditors, and other stakeholders.
To rectify the error, the accountant should adjust the financial statements by reducing the reported income for the amount received from the tenant in December 2021 and recognize it as a liability or unearned income instead. This adjustment will ensure that the financial statements reflect the accurate financial position and performance of Highleys Mall Limited for the year ended 31 December 2021.
Learn more about accountant here: https://brainly.com/question/5640110
#SPJ11
Sasha Company produced 50 defective units last month at a unit manufacturing cost of $40. The defective units were discovered before leaving the plant. Sasha can sell them "as is" for $30 or can rework them at a cost of $25 and sell
them at the regular price of $60. Which of the following is NOT relevant to the sell-or-rework decision?
A. 25 for rework
B) $60 regular selling price
C) $40 manufacturing cost
D) $30 selling price of defective units
C) $40 manufacturing cost is NOT relevant to the sell-or-rework decision. The option that is NOT relevant to the sell-or-rework decision is C) $40 manufacturing cost.
The manufacturing cost of $40 per unit is already incurred and cannot be changed regardless of whether the defective units are sold "as is" or reworked. It is a sunk cost and does not impact the decision between selling or reworking the units. On the other hand, the selling price of the defective units, the cost of rework, and the regular selling price are all relevant factors in the decision-making process. The selling price of the defective units ($30) and the regular selling price ($60) determine the potential revenue from each option. The cost of rework ($25) is an additional expense that needs to be considered when deciding whether the reworked units can be sold at a higher price.
Learn more about sell-or-rework here:
https://brainly.com/question/32521312
#SPJ11
With the gold standard, if an ounce of gold is worth 20 U.S. dollars, and a U.S. dollar is convertible to 0.614 pound sterling. How much does an ounce of gold cost in the pound sterling? a. 12.28 b. 12.89 c. 2.46 d. 32.57
b. 12.89 pounds sterling. To calculate the cost of an ounce of gold in pounds sterling, we first convert the U.S. dollar value of gold to pounds using the exchange rate of 0.614 pounds per dollar. Multiplying 20 dollars by 0.614 gives us 12.28 pounds. Therefore, an ounce of gold costs 12.28 pounds sterling.
To calculate the cost of an ounce of gold in pounds sterling, we need to convert the value from U.S. dollars to pounds using the given exchange rate.
The first step is to determine the value of an ounce of gold in U.S. dollars, which is given as $20.
Next, we multiply this value by the exchange rate of 0.614 pounds per U.S. dollar to convert it to pounds sterling.
Calculating 20 dollars * 0.614 pounds per dollar gives us 12.28 pounds.
Therefore, an ounce of gold costs 12.28 pounds sterling.
Hence, the correct answer is option b, 12.89 pounds sterling.
Learn more about pounds here:
https://brainly.com/question/27994061
#SPJ11
Using the knowledge that you have acquired in the strateglo management counse, you are required to provide the company with some direction and control process and to assist the business to achleve its goals in an environment of constraint and compatition by explaining the FIVE (5) steps in strategic management process with relevant exemples.
2. Snilka is a shoe company founded in Malaysia. "Proud of Local Froducts" is the siogan used by the shoe brand from Kelantan. Sniika-made shoes (inspired by the word sneakers) are not cheap, and its fans belleve the quality of Sniika shoes is able to penetrate the international market. They come with a special edition Slip-On model that takes inspiration from traditional tops and chose corduroy fabric to restore the 'feel' of the 80 s. The cross top pattern that is the theme of the shoe, gives a traditional feel that we may have forgatten. Create a mission statement for the company and elaborate on each of the components that was included in the mission statement.
3. By visiting the Sniika website, we can see there are various products available for purchase. Some of these products are done in collaboration with celebrities while other products are done in conjunction with some festivites or celebration in Malaysia. Other types of shoes include the staple classic which is produced as the basic shoe within their selection of products.
Strategic management is a process that helps companies achieve their goals in a competitive environment by providing direction and control. The five steps in the strategic management process are:
Environmental Analysis: Assessing the external and internal factors that may impact the company's performance and identifying opportunities and threats. For example, Sniika needs to analyze market trends, competitors, and customer preferences to understand the potential demand for its unique shoes.
Setting Objectives: Defining specific, measurable, achievable, relevant, and time-bound goals that align with the company's mission. Sniika's objectives could include expanding into international markets, increasing sales revenue, and establishing collaborations with influential celebrities.
Strategy Formulation: Develop strategies to achieve the objectives by considering the company's strengths and weaknesses. Sniika could focus on product differentiation, emphasizing the quality and cultural heritage of their shoes, while leveraging collaborations and festive-themed releases to create buzz and attract customers.
Strategy Implementation: Executing the chosen strategies by allocating resources, establishing action plans, and monitoring progress. Sniika would need to ensure efficient production processes, effective marketing campaigns, and strong distribution networks to reach its target customers.
Evaluation and Control: Regularly reviewing performance against objectives, adjusting strategies if needed, and maintaining control over operations. Sniika should continuously monitor sales, customer feedback, and market trends to adapt its strategies and ensure they stay competitive.
A mission statement for Sniika could be: "Our mission is to provide high-quality shoes inspired by traditional Malaysian craftsmanship, catering to both domestic and international markets. We aim to blend cultural heritage with contemporary fashion, offering unique and stylish footwear options that celebrate our local identity."
Components of the mission statement:
High-quality shoes: Emphasizes the commitment to producing shoes of superior quality.
Traditional Malaysian craftsmanship: Highlights the brand's inspiration and focus on preserving cultural heritage.
Domestic and international markets: Indicates the intention to target both local and global customers.
Blend cultural heritage with contemporary fashion: Conveys the brand's approach of combining traditional elements with modern trends.
Unique and stylish footwear: Communicates the brand's commitment to offering distinctive and fashionable shoe options.
Celebrate our local identity: Reflects the brand's pride in Malaysian roots and showcases local culture.
For more questions like Company click the link below:
https://brainly.com/question/30532251
#SPJ11
a. Define staffing.
b. Describe FIVE (5) staffing system components.
Staffing refers to the process of acquiring, deploying, and retaining individuals with the required skills, knowledge, and experience to fill the various positions within an organization.
Staffing is a critical function in human resource management that focuses on ensuring the right people are in the right positions at the right time. It involves several components that work together to create an effective staffing system:
1. Human Resource Planning: This component involves analyzing the organization's current and future workforce requirements, identifying gaps in skills or talent, and developing strategies to address those gaps.
2. Recruitment: Recruitment involves attracting a pool of qualified candidates for job openings. It includes activities like job posting, advertising, sourcing candidates, and conducting initial screenings.
3. Selection: Selection is the process of assessing and evaluating candidates to determine their suitability for specific positions. It may involve interviews, tests, assessments, reference checks, and background screenings.
4. Placement and Orientation: Once candidates are selected, they are placed in appropriate positions within the organization. This component involves assigning job roles, negotiating employment terms, and providing orientation and onboarding to familiarize new hires with the organization's policies, procedures, and culture.
5. Training and Development: Staffing also includes providing training and development opportunities to enhance employee skills, performance, and job satisfaction. This component aims to ensure that employees have the necessary knowledge and capabilities to perform their roles effectively.
By implementing these staffing system components effectively, organizations can ensure they have a competent and motivated workforce that aligns with their strategic objectives and contributes to their overall success.
Learn more about policies here:
https://brainly.com/question/30702255
#SPJ11
An amount of $32,000 is borrowed for 10 years at 7% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back? Use the calculator provided and round your answer to the nearest dollar.
The amount that must be paid back at the end of the 10-year period is approximately $61,438.
To calculate the amount that must be paid back, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (borrowed amount), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.
In this case, the principal (P) is $32,000, the annual interest rate (r) is 7% (or 0.07 as a decimal), the number of times interest is compounded per year (n) is 1 (compounded annually), and the number of years (t) is 10.
Plugging in these values into the formula, we get:
A = 32000(1 + 0.07/1)^(1*10)
A = 32000(1.07)^10
A ≈ 32000(1.967151)
A ≈ $61,438
Therefore, the total amount that must be paid back at the end of the 10-year period, including interest, is approximately $61,438
To know more about compound interest ,visit:
https://brainly.com/question/14295570
#SPJ11
Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.90 for direct materials and $1.45 for direct labor. Incremental overhead to make this part is $1.68 per unit. The company can buy the part for $5.32 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? Make Buy (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should
Gelb Company should buy the part instead of making it in-house. The make cost is $5.03 per unit, while the buy cost is $5.32 per unit. The difference of $0.29 per unit is not significant enough to justify the cost and hassle of making the part in-house.
The make or buy analysis shows that the make cost is $5.03 per unit, which is made up of the direct materials cost of $1.90, the direct labor cost of $1.45, and the incremental overhead cost of $1.68.
The buy cost is $5.32 per unit.
Therefore, the company would save $0.29 per unit by buying the part instead of making it in-house.
There are a few factors that could potentially tip the scales in favor of making the part in-house. For example, if the company has excess capacity, then it may be able to make the part at a lower cost than the buy cost.
Additionally, if the company is concerned about quality or delivery, then it may prefer to make the part in-house to ensure that it meets its own standards.
However, in this case, the cost savings of buying the part are significant enough to outweigh these factors.
Therefore, Gelb Company should buy the part instead of making it in-house.
To learn more about cost here brainly.com/question/14566816
#SPJ11
Stock Markets in North America are currently falling- some would say "the worst is yet to come. This phenomena would cause the Aggregate Demand curve in North America to
Oshift downward to the left causing the economy to contract
shift upward to the right causing the economy to contract
Oshift upward to the right causing the economy to expand
Oshift downward to the left causing the economy to expand
In North America, if the stock markets are falling and it is expected that the worst is yet to come, it would typically indicate a decrease in investor confidence and potentially a decrease in consumer confidence as well. This would likely lead to a decrease in spending and investment, resulting in a contraction of the economy.
The Aggregate Demand (AD) curve represents the total demand for goods and services in an economy at different price levels. A downward shift to the left of the AD curve would indicate a decrease in aggregate demand, which aligns with the contractionary effects of falling stock markets.
Therefore, the correct answer is:
Shift downward to the left, causing the economy to contract.Learn more about investment here : brainly.com/question/15105766
#SPJ11
Jamie bought a 20% partnership share by giving $250,000 cash and a land with a basis of $350,000 and FMV of $450,000. Several years later, the partnership sold the land to an unrelated party for $560,000. Why type and how much gain or loss should be reported on Jamie’s Form 1040?
$100,000 pre-contribution gain; $22,000 post-contribution gain; $122,000 total gain
$110,000 pre-contribution gain; $100,000 post-contribution gain; $210,000 total gain
$100,000 pre-contribution gain; $110,000 post-contribution gain; $210,000 total gain
No gain or loss should be recognized
Jamie should report a $100,000 pre-contribution gain and a $22,000 post-contribution gain on Form 1040, resulting in a total gain of $122,000.
When Jamie contributed the land to the partnership, it had a basis of $350,000 and a fair market value (FMV) of $450,000. Since Jamie's share in the partnership was 20%, the deemed sale of the land is calculated based on the proportionate share. The pre-contribution gain is determined by comparing the FMV of the land ($450,000) to its basis ($350,000), resulting in a $100,000 gain.
Later, when the partnership sold the land to an unrelated party for $560,000, Jamie's share of the gain is calculated based on the post-contribution gain. Jamie's 20% share of the gain is $110,000 ($560,000 × 20%).
Therefore, the total gain reported on Jamie's Form 1040 is the sum of the pre-contribution gain and the post-contribution gain, which is $122,000 ($100,000 + $22,000).
It's important to note that Jamie only recognizes a gain on the portion contributed to the partnership, and the post-contribution gain reflects the gain on Jamie's share of the partnership's subsequent sale.
Learn more about Form
brainly.com/question/29474217
#SPJ11
For a monopoly with a positive and constant marginal cost
a) the profit maximizing price is higher than the revenue maximizing price.
b) the total revenue is decreasing in quantity at the profit maximizing price.
c) the profit maximizing price is equal to marginal cost.
d) the profit maximizing price is equal to total average cost.
Please explain your answer with a diagram
The correct answer is (c) the profit maximizing price is equal to marginal cost.
(a) is incorrect because a monopoly with a positive and constant marginal cost does not necessarily set a price higher than the revenue maximizing price.
The profit-maximizing price for a monopoly occurs where marginal revenue equals marginal cost, and it can be lower or higher than the revenue maximizing price depending on the demand elasticity.
(b) is also incorrect because the total revenue is not necessarily decreasing in quantity at the profit maximizing price. It depends on the elasticity of demand. In some cases, total revenue may increase as quantity increases, while in others it may decrease.
(d) is incorrect because the profit maximizing price is not necessarily equal to the total average cost. The profit-maximizing price is determined by the intersection of marginal cost and marginal revenue, whereas the total average cost reflects the average cost per unit of output.
The profit maximizing price for a monopoly occurs where marginal cost equals marginal revenue (MC = MR). This is because at the profit-maximizing quantity, the additional revenue generated from selling one more unit is equal to the additional cost incurred.
By setting the price equal to the marginal cost, the monopoly maximizes its profit by producing the quantity where marginal cost equals marginal revenue.
To learn more about, profit maximizing:-
brainly.com/question/13464288
#SPJ11
TASK Create a contingency_plan for a new airport. The airport 35 km outside of a city in an isolated area. It currently has domestic routes and international flights within the region. There is only one method of public transport, taxis. The airport if currently operating at 62% capacity. Complete your plan using the following stages - 1. Create a list identify all possible risks. 2. Rank those risks by those who have the highest impact on passengers/operations. 3. Choose the top 2 risks and identify possible solutions for them. 4. Choose the best solution for each. 5. Decide which departments and managers will be responsible for implementing these solutions is the situation arises. 6. Research the costs of this solution Explain the step-by-step process of this solution is the situation(risk) occurs.
1, Adverse weather, security threats, air traffic disruptions, technical failures, strikes, public transport disruption, health emergencies, natural disasters. 2, Adverse weather, security threats, air traffic disruptions, technical failures, strikes. 3, Adverse weather (monitoring, contingency plans) and security threats (robust security measures, collaboration). 4, Implement selected solutions based on feasibility and effectiveness. 5, Operations for adverse weather, Security for security threats. 6, Conduct a comprehensive analysis of costs associated with implementing the solutions.
Contingency Plan for a New Airport:
1, List of Possible Risks:
Adverse weather conditions (storms, heavy snowfall)
Security threats (terrorist activities, breaches)
Air traffic control disruptions
Technical failures (power outage, communication systems failure)
Strikes or labor disputes
Public transport disruption (taxi strikes or unavailability)
Health emergencies (pandemics, disease outbreaks)
Natural disasters (earthquakes, floods)
2, Ranking Risks by Impact:
Rank the risks based on their potential impact on passengers and airport operations. For example
Adverse weather conditions
Security threats
Air traffic control disruptions
Technical failures
Strikes or labor disputes
Public transport disruption
Health emergencies
Natural disasters
3, Top 2 Risks and Possible Solutions:
a. Adverse weather conditions:
Establish effective weather monitoring systems
Develop contingency plans for diverting flights or delaying operations during severe weather
Maintain a stock of necessary equipment and resources for snow removal or other weather-related challenges
b. Security threats
Implement robust security measures, including surveillance systems, access control, and screening procedures
Collaborate with local law enforcement and intelligence agencies for threat assessments and information sharing
Conduct regular security drills and training for airport staff
4, Best Solutions:
Based on further analysis and consultation, select the most suitable solutions for each identified risk. These decisions will depend on various factors, including feasibility, effectiveness, and cost considerations.
Responsible Departments and Managers:
Assign departments and managers responsible for implementing the solutions:
5, Adverse weather conditions: Operations Department, led by the Operations Manager
Security threats: Security Department, led by the Security Manager
Cost Research:
Conduct thorough research to determine the costs associated with implementing the selected solutions. Consider expenses related to infrastructure upgrades, equipment procurement, training programs, and ongoing maintenance.
6, Step-by-Step Process for Solution Implementation:
In the event of a specific risk occurrence, follow these steps:
Activate the predefined contingency plan for that particular risk.
Communicate with relevant stakeholders, including airport staff, airlines, passengers, and local authorities.
Deploy necessary resources and personnel to address the situation.
Continuously monitor the situation and adjust the response as needed.
Communicate updates and instructions to all parties involved.
Document the incident, response actions, and outcomes for future evaluation and improvement.
To know more about Airport:
https://brainly.com/question/32967020
#SPJ4
For a debt securities portfolio classified as available-for-sale, which of the following amounts should be included in the period's net income?
I. Unrealized temporary losses during the period
II. Realized gains during the period
III. Changes in the credit loss allowance during the period
For a debt securities portfolio classified as available-for-sale, the following amounts should be included in the period's net income:
II. Realized gains during the period.
Realized gains from the sale of debt securities are recognized in the net income for the period. These gains represent actual gains realized from selling the securities at a higher price than their carrying value.
Unrealized temporary losses during the period (I) are not included in the net income. They are typically reported in the other comprehensive income section of the financial statements.
Changes in the credit loss allowance during the period (III) are not included in the net income either. These changes are also usually reported in the other comprehensive income section or as a separate line item in the financial statements.
Therefore, only realized gains during the period should be included in the net income for a debt securities portfolio classified as available-for-sale.
To know more about financial statements, visit:
https://brainly.com/question/30355441
#SPJ11
You are an enterprise risk manager at a new video streatning platform. In today's risk meeting your team has identified three emerging risks. As the mianager, your job is to use the risk table above to rate the likelihood, rate the impact, calculate the risk score, and prioritize these three risks. You must also include the reasoning behind your rankings.
After evaluating the three emerging risks, the risk of Content Piracy has been ranked as the highest priority, followed by Cybersecurity Breach and Market Competition.
Content Piracy has been rated as the highest priority due to its significant potential impact and moderate likelihood. As a new video streaming platform, protecting intellectual property and preventing unauthorized distribution of content is crucial. Content piracy can lead to revenue loss, damage to brand reputation, and legal implications. Therefore, immediate measures should be taken to implement robust content protection mechanisms, including encryption and digital rights management solutions, to minimize the risk of piracy and ensure content creators' rights are safeguarded.
The risk of Cybersecurity Breach has been assigned the second-highest priority, considering its potential impact and increasing sophistication of cyber threats. With the growing reliance on digital platforms, the risk of data breaches, unauthorized access, and potential customer information leaks poses a significant concern. To mitigate this risk, the streaming platform should implement strong cybersecurity measures, such as regular security audits, encryption protocols, multi-factor authentication, and employee training on cybersecurity best practices.
Market Competition has been ranked as the lowest priority among the identified risks. While competition in the streaming industry is intense, the impact and likelihood of market competition significantly affecting the new platform's success may be relatively lower compared to content piracy and cybersecurity breaches. Although it's essential to monitor and adapt to market trends, the primary focus should initially be on strengthening content protection and cybersecurity measures to establish a solid foundation for the platform's growth and sustainability.
Learn more about risks here:
https://brainly.com/question/31781139
#SPJ11
asset allocation enables investors to diversify among various financial assets
Asset allocation enables investors to diversify among various financial assets by spreading their money into a variety of investments and asset classes. An investor has to decide on the right combination of assets to optimize risk and reward. The goal of asset allocation is to create a portfolio of investments that provides the most significant returns for the amount of risk the investor is willing to take. Some investors want a lower return and are willing to accept a lower risk, while others want a higher return and are willing to take on more risk.
Investors can diversify their portfolios by using different investment classes, such as stocks, bonds, cash, or mutual funds, and by spreading their investments across a variety of sectors, such as technology, healthcare, finance, or energy. The idea is that if one asset or sector experiences a downturn, the investor's portfolio will be less affected because they have spread their investments across different areas. This diversification can help minimize the risk associated with investing and maximize the potential return.
To know more about Assets, click here
brainly.com/question/27972503
#SPJ11
Who are key decision makers in an organisation Regional
Coordinating Councils in Ghana?
What factors influence the agility levels of public
institutions/companies
Develop questions that can be put to
The key decision-makers in an organization Regional Coordinating Councils in Ghana are the Regional Ministers who are appointed by the President of Ghana in consultation with the Public Services Commission, according to the 1992 Constitution of Ghana.
The key decision-makers in Regional Coordinating Councils (RCCs) are responsible for coordinating and monitoring the activities of the various decentralized departments and agencies in each region of Ghana. The factors that influence the agility levels of public institutions/companies are the following:
- Size of organization - Smaller companies are generally more agile than larger ones.
- Leadership - The effectiveness of leadership can have a significant impact on the agility of an organization.
- Processes and procedures - The way an organization operates and makes decisions can either facilitate or hinder agility.
- Work culture - A culture that encourages flexibility and adaptability can make an organization more agile.
- Resources - Adequate resources, such as funding and technology, can enable an organization to respond quickly to changes in its environment.
Now, here are some questions that can be put to test the agility levels of public institutions/companies:
1. What processes do you have in place to quickly respond to changes in the market? Can you give an example of a time when your organization had to adapt quickly to a new situation?
2. What steps are you taking to make your organization more agile?
3. How does your organization encourage innovation and flexibility?
4. What resources do you need to respond more quickly to changes in the market?
Learn more about key decision-makers:
https://brainly.com/question/13727684
#SPJ11
Dinshaw Company is considering the purchase of a new machine. The invoice price of the machine is $72,986, freight charges are estimated to be $2,830, and installation costs are expected to be $7,240. The annual cost savings are expected to be $15,000 for 9 years. The firm requires a 21% rate of return. Ignore income taxes. What is the internal rate of return on this investment? (Round answer to O decimal places, e.g. 15K)
The internal rate of return on the investment in the new machine is 21%.
The internal rate of return (IRR) is the discount rate at which the net present value (NPV) of an investment becomes zero. In this case, we need to calculate the IRR to determine the rate of return that will make the NPV of the investment in the new machine equal to zero.
The initial cash outflow for the investment includes the invoice price of the machine ($72,986), freight charges ($2,830), and installation costs ($7,240), which sum up to $83,056. The annual cost savings of $15,000 are expected for 9 years. Using these cash flows, we can calculate the NPV of the investment using a discount rate of 21%. By adjusting the discount rate, we can find the rate at which the NPV becomes zero, which is the internal rate of return.
In this case, the internal rate of return on the investment in the new machine is 21%, indicating that the investment is expected to generate a return equal to the firm's required rate of return.
Learn more about IRR here:
brainly.com/question/28288572
#SPJ11