4. A plant manager considers the operational cost per hour of five machine alternatives. The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm. The following table represents the operations cost per hour for each alternative- state of nature combination: Alternatives Cold cost/day Mild cost/day Warm cost/day Machine 1 $45 $35 $40 Machine 2 $40 Machine 3 $35 Machine 4 $55 Machine 5 $40 $37 $30 $20 $35 Using the optimistic criterion, which alternative is best? $42 $48 $44 $40
Q: PantherCats has total assets of $66,185, net working capital of $20,275, owners' equity of $32,207,…
A: Total Asset = $66185 Net Working Capital = $20275 Equity = $32,207 Long-term debt = $23,677
Q: What is the future value of $4,500 after 6 years if the nominal interest rate is 8.50% compounded…
A: The concept of time value of money will be used here. To compute the future value we compound the…
Q: Assume that you have $33,000 invested in a stock that is returning 10.8%, $15,000 invested in a…
A: The total investment in a portfolio is calculated as the sum of investment in all the three stocks.…
Q: A U.S. bank converted $1 million to Swiss francs to make a Swiss franc loan to a valued corporate…
A: Amount in USD = $1,000,000 Interest Rate = 5% Exchange Rate = 1.3 The exchange rate on loan = 1.2…
Q: PVI 1-(1+0 Find the amount that should be invested now to accumulate $5,000, if the money is…
A: Future value = fv = $5000 Compound = semiannually = 2 Interest rate = r = 5 / 2 = 2.5% Time = n = 12…
Q: Canadian Denmark Euro S per Foreign Currency $.7800 $.2000 $.9900 Foreign Currency per 1.2821 5.0000…
A: a)To determine how many Canadian dollars you would receive for $500, you need to use the foreign…
Q: There is a two-year zero-coupon bond with a face value of $100. Suppose that there is a bank that is…
A: A bond is an instrument that provides debt capital to the issuer from its investors. It differs from…
Q: Give typing answer with explanation and conclusion A share of common stock is paying $3.50 per…
A: Earning per share=$3.50 Anticipated growth rate (g)=8% Yield rate (r)=10% Payout ratio =40% The…
Q: You own a portfolio of risky, 10-year bonds with a contractual yield of 7%/year. You expect 4% of…
A: To calculate the expected yield per year, we need to take into account both the yield on the bonds…
Q: Fuzzy Button Clothing Company reported sales of $820,000 at the end of last year; but this year,…
A: Data given: Sales=$820,000 Sales growth=7% Profit Margin=23% Payout ratio=30% Total assets= $425000…
Q: The following limited information is available for returns on two shares listed on the Lusaka…
A: Historical returns of two stocks are available. Assuming they are normally distributed, the average…
Q: Pecking order hypothesis. Rachel can raise capital from the sources in the popup window: What is…
A: Sources of funds Interest rate Borrowing limit Parents 1% $12,000 Friends 6.50% $3,000 Bank…
Q: Sato Company is considering an investment in equipment that is capable of producing more efficiently…
A: To compute the payback period, we need to find out the time it takes for the initial investment to…
Q: 5) Weight in portfolio 30% 25% Apple 20% JPMorgan Chase 25% Starbucks Caterpillar HPR 12/31/14 -…
A: Portfolio return is that return which is earned by the investor on his investment during the period…
Q: ______ is the process of determining the price that market participants would likely pay for…
A: Valuation is a process used to estimate the intrinsic value of an asset like stock, bond, business…
Q: 3. How much should I expect a lump sum from a deal at the end of 3 years if I start investing today…
A: Compound = quarterly = 4 Time = t = 3 * 4 = 12 Payment = p = P5800 Interest rate = r = 15 / 4 =…
Q: The educational trust fund for your children earns interest at 5.8% compounded monthly. What initial…
A: Understanding the future value of an investment can be an important factor in making investment…
Q: You have bought a condominium for $80,000. You paid 10% down and are financing the rest with a…
A: The idea of the time value of money (TVM) holds that a quantity of income is valued currently more…
Q: PM Elements free rate (far) et risk premium (RPM) py Corp, stock's beta quired rate of return on…
A: According to CAPM, with risk free rate (R), market risk premium (MRP) and beta, the required return…
Q: the current yield curve for default-free zero coupon bonds are: 1-year 7%; 2-year 8%; 3-year 9%.…
A: Spot rates are available for various maturities. Two year forward rate, a year from now, is to be…
Q: "Rough & Ready" is a tool manufacturing business based in Melbourne. The entity's tax rate is 30%.…
A: (a) The cash flows associated with the equipment replacement project are as follows: Year 0: Initial…
Q: An inverted yield curve Part 1 A. results when investor demand for longer maturities exceeds the…
A: the yield curve is a graphical representation of the relationship between the interest rates of…
Q: QUESTION 5 Your client is currently 21 years old. The interest rate on the funds your client has…
A: It is a case of calculating the future value of annual deposits that will be used to make annual…
Q: Present Value of a Perpetuity What's the present value, when interest rates are 6.70 percent, of a…
A: Perpetuities are often used in financial models to represent long-term cash flows that are expected…
Q: The values of Treasury bonds can change widely with changes in interest rates. True False
A: Treasury bonds are long-term debt securities issued by the U.S. Department of the Treasury to…
Q: Interest Rate Parity The nominal yield on 6-month T-bills is 4%, while default-free Japanese bonds…
A: It is important to note that any predictions or projections of investment returns are inherently…
Q: Company Z forecasts a positive Free Cash Flow for the coming year, with FCF1 = $20,000,000, and it…
A: Free cash flow (FCF 1)=$20,000,000 The growth rate for two years=20% At year 3, Growth rate=5%…
Q: Which of the following is a feature that distinguishes a traditional performance budget from other…
A: Quantitative performance objectives for agencies and departments is a feature that distinguishes a…
Q: Company A is currently cash-constrained, and must make a decision about whether to delay paying one…
A: To compute the Effective Annual Rate (EAR) of the loan, we need to consider the Annual Percentage…
Q: Calculate the IRR for a project with an initial outlay of $10,000 resulting in a single cash flow of…
A: 1. IRR means internal rate of return . It is the rate of return where NPV is equal to 0. Thus , at…
Q: Use Exhibit 20-6, Mutual Fund Quotation Table, to find the information for the mutual fund. American…
A: The stock market provides a platform for companies to raise capital by selling their shares to the…
Q: Consider the following balance sheet for Watchoveru Savings Incorporated ($ in millions): Assets…
A: Interest Earned : Interest on Mortgage = 62 × 14 % = 8.68 Interest on Fixed loans = 62 × 11% = 6.82…
Q: Calculate the cost of equity with the CAPM Calculate the cost od debt based on what the company is…
A: Capital Asset pricing model is an important model used in valuation by understanding the securities…
Q: Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown…
A: A portfolio consists of two or more financial assets. In this case the financial asset is in the…
Q: If an investor that owns a portfolio with 3 stocks increases their portfolio to 30 stocks, which of…
A: When a portfolio is created, then it includes different types of stocks and other securities. It…
Q: Having heard about IPO underpricing, I put in an order to my broker for 1,110 shares of every IPO he…
A: Data given: IPO Shares Allocated to me Price per share ($) Initial Return (%) A 610 12 7 B…
Q: Cullumber Corp, is considering purchasing one of two new diagnostic machines. Either machine would…
A: Capital budgeting involves making decisions about long-term investments that have significant…
Q: Only typing. .... . A strip is a variation of a straddle involving two puts and one call.…
A: A strip is a bearish options trading strategy that involves selling two puts and buying one call…
Q: You buy a stock for $34 per share and sell it for $36 after you collect a $1.00 per share dividend.…
A: The dividend yield is calculated.in order to understand the composition of dividend policy and…
Q: L&O recently paid a dividend of $1.50. The stock is currently trading at $35. If the required rate…
A: Growth Rate is that rate at which rate price of share or dividend amount will increase with…
Q: QUESTION 6 The risk-free rate is 5%. The expected market rate of return is 13%. If Stock A which has…
A: Capital Asset Pricing Model (CAPM) helps to find out the expected return of individual security or…
Q: Beginning in January, a person plans to deposit $1 at the end of each month into an account earning…
A: The concept of time value of money will be applied here. The deposits of $1 in each month is an…
Q: D e s c r i b e , c o m p a r e , a n d c o n t r a s t t h e f o l l o w i n g c o m m…
A: The valuation of common stocks is a complex process that requires consideration of multiple factors,…
Q: Following is the forecast of Tintin Company (FY2021 – 2023)? EPS is Earnings per Share, DPS denoted…
A: To calculate the implied growth rate, we can use the Gordon Growth Model formula: Market Price per…
Q: Pear Orchards is evaluating a new project that will require equipment of $225,000. The equipment…
A: Book value of the machine at the end of 4 years is calculated and then the after tax salvage value…
Q: sub : finance Please type the answer.no chatgpt. i ll upvote. Thank You Hammond Suspension Inc.’s…
A: As per the given information: Cash flow from operations - $57300Depreciation expense - $7650Change…
Q: any, a young MBA graduate, has up to $1000 stocks and loans. Investing in stocks yields a pront of…
A: Total profit for a portfolio having two securities is calculated as shown below. Total profit=Return…
Q: The Financial Markets in Zambia have experienced mergers and acquisitions in the recent past years.…
A: A. The merged banks, Access Bank Plc and Atlas Mara Limited, can conduct operations in various…
Q: Payback Period Each of the following scenarios is independent. Assume that all cash flows are…
A: According to bartleby guidelines , if multiple questions are asked , then 1st question needs to be…
Q: Give typing answer with explanation and conclusion You are considering investing in DPN stock. Your…
A: Year ending price and the returns have been provided. We need to find the dividend received in 2017.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
- A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine Cost A $ 60,000 B $ 50,000 C $ 60,000 Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product AnnualDemand A B C 1 16,000 3 4 4 2 10,000 6 5 1 3 15,000 1 3 6 4 17,000 5 3 4 a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 240 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quantities. Enter the resulting total purchasing cost as a whole number. Omit the "$" sign.) Total…A company anticipates the cost to heat the building will be $21.000. Product A Lakes up 500 square feet of space, while Product B takes up 200 square feet. The activity rate per product using activity-based costing would be which of the following? A. $30/square foot B. $4.20/square foot C. $11/square foot D. $15.20/square footUse the following standard cost card for 1 gallon of ice cream to answer the questions. Actual direct costs incurred to make 50 gallons of ice cream: 275 quarts of cream at $1.05 per quart 832 ounces of sugar at $0.075 per ounce 165 minutes of labor at $37 per hour All material used was bought during the current period. A. Compute the material and labor variances. B. Comment on the results and possible causes of the variances.
- Use the following information for Exercises 5-44 through 5-46: The following six situations at Diviney Manufacturing Inc. are independent. a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is 12, the cost per machine hour is 8, and the cost per pound of materials is 10. b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is 50. c. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is 20. d. Inspection time for a plant is 16,000 hours per year. The cost of inspection consists of salaries of 8 inspectors, totaling 320,000. Inspection also uses supplies costing 5 per inspection hour. The company eliminated most defective components by eliminating low-quality suppliers. The number of production errors was reduced dramatically by installing a system of statistical process control. Further quality improvements were realized by redesigning the products, making them easier to manufacture. The net effect was to achieve a close to zero-defect state and eliminate the need for any inspection activity. e. Each unit of a product requires 6 components. The average number of components is 6.5 due to component failure, requiring rework and extra components. Developing relations with the right suppliers and increasing the quality of the purchased component can reduce the average number of components to 6 components per unit. The cost per component is 500. f. A plant produces 100 different electronic products. Each product requires an average of 8 components that are purchased externally. The components are different for each part. By redesigning the products, it is possible to produce the 100 products so that they all have 4 components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated savings from the reduced demand are 900,000 per year. 5-45 Driver Analysis Refer to the information for Diviney Manufacturing on the previous page. Required: CONCEPTUAL CONNECTION For each situation, identify the possible root cause(s) of the activity cost (such as plant layout, process design, and product design).Use the following information for Exercises 5-44 through 5-46: The following six situations at Diviney Manufacturing Inc. are independent. a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is 12, the cost per machine hour is 8, and the cost per pound of materials is 10. b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is 50. c. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is 20. d. Inspection time for a plant is 16,000 hours per year. The cost of inspection consists of salaries of 8 inspectors, totaling 320,000. Inspection also uses supplies costing 5 per inspection hour. The company eliminated most defective components by eliminating low-quality suppliers. The number of production errors was reduced dramatically by installing a system of statistical process control. Further quality improvements were realized by redesigning the products, making them easier to manufacture. The net effect was to achieve a close to zero-defect state and eliminate the need for any inspection activity. e. Each unit of a product requires 6 components. The average number of components is 6.5 due to component failure, requiring rework and extra components. Developing relations with the right suppliers and increasing the quality of the purchased component can reduce the average number of components to 6 components per unit. The cost per component is 500. f. A plant produces 100 different electronic products. Each product requires an average of 8 components that are purchased externally. The components are different for each part. By redesigning the products, it is possible to produce the 100 products so that they all have 4 components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated savings from the reduced demand are 900,000 per year. 5-44 Nonvalue-Added Costs Refer to the information for Diviney Manufacturing on the previous page. Required: Estimate the nonvalue-added cost for each situation.Shale Remodeling uses time and materials pricing. It reports the following iInformation. Direct labor rate $ 150 per DLH $ 120 per DLH 288 of dairect materials cost Non-materials-related overhead Materials-related overhead Target profit margin (both conversion and direct materials) 208 The time charger per hour of direct labor is: Multiple Choice $288. $333. $324. 204.
- Write a linear cost function equation for each of the following conditions. Use y for estimated costsand X for activity of the cost driver. Machine operating costs include $1,000 of maintenance per month, and $15.00 of coolant usagecosts for each day the machinery is in operation.Shale Remodeling uses time and materials pricing. It reports the following information: Direct labor rate Non-materials-related overhead Materials-related overhead Target profit margin (both conversion and direct materials) $ per DLH 100 $70 per DLH 10% $990. $1,396. $1,168. $1,222. $1,570. 20% of direct materials cost What price should the company quote for a job requiring four direct labor hours and $580 in materials?Using the following information for question 8-10 Honeydew Company produces two products, a high-end laptop computer under the label Bunsen Laptops, and an inexpensive desktop computer under the label Beaker Computers. The two products use two overhead activities, with the following costs: Setting up equipment Machining $2,000 12,000 The controller has collected the expected annual prime costs for each product, the machine the setup hours, and the expected production. Bunsen Beaker Direct Labor Direct Materials Expected Production in Units Machine hours $20,000 $5,000 15,000 4,000 2,000 2,000 750 1,500 Setup hours 50 50 8. Calculate Beaker's consumption ratio for setup hours. a. 0.50 b. 0.45 c. 0.90 d. 0.25
- The estimated costs of producing 6,000 units of a component are: Per Unit Direct Material Direct Labor $10 8. Applied Variable Factory Overhead 9. Applied Fixed Factory Overhead $1.5 per direct labor dollar The same component can be purchased from market at a price of $29 per unit. If the component is 12 purchased from market, 25% of the fixed factory overhead will be saved. Required: a. Should the component be purchased from the market? b. Being a production manager, provide your logical opinion on choosing between purchasing the component from market or producing in-houseUsing the following information for question 8-10 Honeydew Company produces two products, a high-end laptop computer under the label Bunsen Laptops, and an inexpensive desktop computer under the label Beaker Computers. The two products use two overhead activities, with the following costs: Setting up equipment Machining $2,000 12,000 The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. Direct Labor Direct Materials Expected Production in Units Machine hours Setup hours 8. Calculate Beaker's consumption ratio for setup hours. a. 0.50 b. 0.45 c. 0.90 d. 0.25 Bunsen Beaker $20,000 $5,000 15,000 4,000 2,000 2,000 750 1,500 50 50A value stream has three activities and two products. The units produced and shipped per week are 50 of the deluxe model (Model A) and 150 of the basic model (Model B). The resource con- sumption patterns are shown as follows: Costs of Value- Model A Model B Stream Activities Cell manufacturing Engineering Testing Total $ 76,800 27,200 24,000 2,400 min. 7,200 min. 60 hrs. 260 hrs. 100 hrs. 220 hrs. $128,000 Required: 1. Calculate the ABC product cost for Models A and B. 2. Calculate the value-stream average product cost. Assuming reasonable stability in the con- sumption patterns of the products and product mix, assess how well the products are grouped based on similarity.