During the current year, Beta Company incurred the following costs related to a new solar-powered car: Salaries of laboratory employees researching how to build the new car Legal fees for the patent application for the new car Engineering follow-up during the early stage of commerical production during the current year Marketing research to promote the new car Design, testing and construction of a prototype 2,500,000 200,000 500,000 300,000 4,000,000 What amount should be reported as research and development expense?
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- The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 17 $2,090,000 $87,000 $396,000 $56,000 $9,000 X-TRUD 13 $2,610,000 $93,000 $534,000 $60,000 $11,000 SUPR-X 11 $2,430,000 $119,000 $638,000 $53,000 $13,000 The company's interest rate (MARR) is 21%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the lowest M&O cost in yr1 Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-127,486 higher than X and $15,650 higher than X-TRUD. Choosing SUPR-X will maximize the EUAB-EAUC; its value is $117,514 higher than X and $126,650 higher than X-TRUD.The following costs are incurred by Everlasting Corporation in 2022: a. Cost of activities aiming new knowledge P150,000 b. Cost of developing and producing prototype model 30,000 c. Cost of seminars to introduce the newly develop product 120,000 d. Advertisement cost to introduce the newly develop product 60,000 e. Cost incurred for search of alternatives 35,000 f. Cost of final selection of possible alternatives 50,000 g. Cost of machine acquired to be used only in an R&D project 300,000 h. Cost of engineering follow through in an early phase of commercial production 50,000 i. Adaptation of an existing capability to particular customers need 36,000 j. Salaries of employees involved in R&D 480,000 k. Radical modification to the formulation of a chemical product 40,000 l. Laboratory…Reference: Case Study S Dunn Manufacturing is considering the following two alternatives. The cost information for the two proposals for replacing an equipment are provided are in table below. Initial cost Benefits/year Machine X $120,000 $20,000 for the first 10 years and $9,000 for the next 10 years Life Salvage value $40,000 MARR 5.2. The NPW of machine X is A) $35,158 B) $48,192 C) $50,752 Machine Y $96,000 $12,000 per year for 20 years. 20 years 8% $20,000
- The Fence Company is setting up a new production line to create top rails. The relevant data for two alternatives are shown below. Flow Line Manufacturing Cell Installed Cost Expected Life Salvage Value Variable Cost per Top Rail Click here to access the TVM Factor Table Calculator $15,000 5 years $0 $6.00 $10,000 5 years $0 $7.00Dunder Mifflin Paper Company is considering the following two alternatives. The cost information for the two proposals for replacing an equipment are provided are in table below. Machine A Machine B Initial cost $120,000 $96,000 $20,000 for the first 10 years $12,000 per year for 20 Benefits/year and $9,000 for the next 10 years. years Life 20 years for both Salvage value $40,000 $20,000 interest 8% per year for both The NPW of machine A is Choose the closest answer.5. Dawg Engineering is considering a new machine for its assembly line, Each choice has a 10 year life. Calculate the IRR for each alternative Initial Cost $132,000.00 $186,000.00 $144,000.00 Annual Benefit $52,000.00 $42,00.00 $56,000.00 Yearly O & M $33,000.00 $12,000.00 $32,000.00 cost Salvage value $15,000.00 $9,000.00 $16,000.00 IRR-A IRR-B IRR-C
- Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $491,000 cost with an expected four-year life and a $20,000 salvage value Additional annual information for this new product line follows PV of $. EX of St. PVA of Stand EVA of $ (Use appropriate factors) from the tables provided) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery 1. Determine income and net cash flow for each year of this machine's life. 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year 3. Compute net present value for this machine using a discount rate of 7% Complete this question by entering your answers in the tabs below. Required 1 Required 2 year 4 Required 3 Compute net present value for this machine using a discount rate of 7%. (Do not round intermediate calculations. Negative amounts should be entered with a minus sign.…Give typing answer with explanation and conclusion A new production system for a factory is to be purchased and installed for $154982. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $9668 at year 6. Using the PW method to analyzes if this investment is economically justified A- calculate the PW of the above investment and insert the result below.Seong Seng Coachbuilders is considering purchasing a new machine to replace an old one. Cost of new machine: Purchase price $85,000 Installation & Commissioning $10,000 The proposed new machine is to be depreciated using the straight line method over its four-year useful life with an estimated salvage value of $15,000. The proposed new machine is expected to increase sales and operating expenses and the amount are expected to be constant over the project’s 4 year life. Sales $65,000 Operating expenses $26,000 Seong Seng operating working capital is also expected to increase as follows: Inventory $12,000 Accounts receivable $8,000 Accruals $3,000 Accounts payable $6,000 The old, existing machine is also being depreciated using the straight line method over its 6 years useful life towards zero salvage. It was purchased…
- Reacher Corporation is evaluating a proposal to purchase a new machine that would cost $100,000 and would have a salvage value of $12,000 in 4 years. It would provide annual savings of $10,000 as noted below. Direct materials Direct labour Share of allocated overhead Old Machine $40,000 New Machine $36,000 7,000 5,000 9,000 5,000 $56,000 $46,000 Total Costs If the new machine is purchased, the old machine will be sold for its current salvage value of $20,000 whereas if the new machine is not purchased, the old machine will be disposed of in 4 years at a predicted salvage value of $2,000. The old machine has a present book value of $40,000. If kept, in one year the old machine will require estimated repairs of $25,000. The firms cost of capital is 10%. Present value factors at 10% are provided below. Year PV of $1 PV of Annuity of $1 1 0.909 0.909 2 0.826 1.736 3 0.751 2.487 0.683 3.170 Required: Showing all relevant calculations in good presentation form, should the machine be…Seong Seng coachbuilders is considering purchasing a new machine to replace an old one. Cost of new machine. Purchase price $85,000 Installation & commissioning $10,000 The proposed new machine is to be depreciated using the straight- line method over its four year useful life with an estimated salvage value of $15,000. The proposed new machine is expected to increase sales and operating expenses and the amount is expected to be constant over the project’s 4 year life. Sales $65,000 Operating expenses $26,000 Seong Seng operating working capital is also expected to increase as follows: Inventory $12,000 Account receivable $8,000 Accounts $3,000 Account payable $6,000 The old, existing machine is also being depreciated using the straight-line method over its 6years of useful life towards zero salvage. It was purchased 2 years…In an energy systems installation, following financial requirement was identified. Capital cost of equipment and installation - $ 150,000 Recurrent cost of maintenance Replacement of parts Life time of the system Income through energy generation i. iii. -$5,000 per year -$4,000 per year - 12 years - $ 22,000 per year Calculate the payback period of the system. If the scarp value of the equipment is $ 5,000, determine is the net profit expected to be collected for the investment? Explain how this profit is affected by "cost of money" or "interest". No calculations needed.