Perit Industries has $135,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Project A Project B Cost of equipment required $ 135,000 $ 0 Working capital investment required $ 0 $ 135,000 Annual cash inflows $ 25,000 $ 63,000 Salvage value of equipment in six years $ 9,800 $ 0 Life of the project 6 years 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries’ discount rate is 17%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.

Answer:

1. Net present value of Project A = -41,449.96

2. Net present value of Project B = $143,746.85

3. I would recommend that company accept Project B.

Explanation:

Note: This question is not complete as the requirement are omitted. The requirements are therefore provided to complete the question before answering it as follows:

Perit Industries has $135,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:

                                                                       Project A           Project B

Cost of equipment required                         $ 135,000                $ 0

Working capital investment required                 $ 0               $ 135,000

Annual cash inflows                                       $ 25,000           $ 63,000

Salvage value of equipment in six years        $ 9,800                $ 0

Life of the project 6 years 6 years

The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries’ discount rate is 17%.

Required:

1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)

2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)

3. Which investment alternative (if either) would you recommend that the company accept?

The explanation of the answers is now provided as follows:

1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)

Cost of equipment required = $135,000

Using the formula for calculating the present value of an ordinary annuity, the present value (PV) of the annual cash inflows can be calculated as follows:

PV of annual cash inflow = Annual cash inflow * (1 - (1 / (1 + discount rate))^Project life) / discount rate) = $25,000 * ((1 - (1 / (1 + 0.17))^6) / 0.17) = $89,729.62

The present value (PV) of the salvage value can be calculated as follows:

PV of salvage value = Salvage value / (1 + + discount rate)^Project life = $9,800 / (1 + 0.17)^6 = $3,820.42

Net present value of Project A = PV of annual cash inflow + PV of salvage value - Cost of equipment required = $89,729.62 + $3,820.42 - $135,000 = -41,449.96

2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)

Working capital investment required = $135,000

Using the formula for calculating the present value of an ordinary annuity, the present value (PV) of the annual cash inflows can be calculated as follows:

PV of annual cash inflow = Annual cash inflow * (1 - (1 / (1 + discount rate))^Project life) / discount rate) = $63,000 * ((1 - (1 / (1 + 0.17))^6) / 0.17) = $226,118.64

The present value (PV) of the Working capital investment required can be calculated as follows:

PV of Working capital investment required = Working capital investment required / (1 + + discount rate)^Project life = $135,000 / (1 + 0.17)^6 = $52,628.21

Net present value of Project B = PV of annual cash inflow + PV of Working capital investment required - Working capital investment required = = $226,118.64 + $52,628.21 - $135,000 = $143,746.85

3. Which investment alternative (if either) would you recommend that the company accept?

From parts 1 and 2 above, we have:

Net present value of Project A = -41,449.96

Net present value of Project B = $143,746.85

Since the Net present value of Project A is negative, it should be rejected.

Since the Net present value of Project B is positive, it should be accepted.

Therefore, I would recommend that company accept Project B.

True or false: Interest expense and income tax expense are considered general and administrative expenses and, therefore, are included on the general and administrative expense budget. True false question. True False

Blooming Sun investment corporation is facing problems in their records
maintenance, So they have decided to launch a new Management Information
system. The cost of MIS includes 150 computers at $500 each, 5 Printers at
$400 each, 5 network connections at $900 each, 20 boxes of Papers and
stationery at $50 each, 5 Scanners at $2995 each. The training cost that is
required to be provided to the staff includes fringe benefits $50 each to 150
participants, 15 trainers at $ 500 each. Training room is required for three
sessions which will cost $750 per session and administrative cost is $300 per
session.
The experts have estimated that the new MIS will be helpful in adding $25000
per year in benefits.
Questions:
1. Identify the direct cost, Training cost and total cost of Management information system?

2. In how many years the breakeven of this project cost will be achieved?

Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs:
Direct materials $5.00
Direct labor 3.00
Variable overhead 1.50
Fixed overhead 7.00
Variable marketing cost 1.20
Fixed overhead per unit 1.20
Total fixed factory overhead is $280,000 per month. During October, 38,400 units were sold at a price of $24, and fixed marketing and administrative expenses were $130,500.
Required:
1. Calculate the cost of each unit using absorption costing.
2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing?
3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October.

Newhard Company assigns overhead cost to jobs on the basis of 114% of direct labor cost. The job cost sheet for Job 313 includes $26,530 in direct materials cost and $10,500 in direct labor cost. A total of 1,400 units were produced in Job 313.

Required:
a. What is the total manufacturing cost assigned to Job 313?
b. What is the unit product cost for Job 313?

DonCo. Inc. sold merchandise on January 14, and accepted a 90 day, 5% promissory note in the amount of $5,000. On January 14, the entry to record this transaction would include a debit to:
a. Cash in the amount of $5,000
b. Notes Receivable in the amount of $5,000
c. Accounts Receivable in the amount of $5,000
d. Sales in the amount of $5,000

Your uncle offers you a choice of $112,000 in 10 years or $51,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 8 percent, what is the present value of the $112,000

Landon Stevens is evaluating the expected performance of two common stocks, Furhman Labs, Inc., and Garten Testing, Inc. The risk-free rate is 4.4 percent, the expected return on the market is 10.6 percent, and the betas of the two stocks are 1.4 and 0.7, respectively. Stevens’s own forecasts of the returns on the two stocks are 10.60 percent for Furhman Labs and 10.50 percent for Garten.

Required:
a. Calculate the required return for each stock.
b. Is each stock undervalued, fairly valued, or overvalued?

Suppose a market is initially in equilibrium and demand decreases. The producer surplus will:_____.
a. be higher since the price is lower and equilibrium moves down along the supply curve.
b. be higher since the price is lower and equilibrium moves up along the supply curve.
c. be lower since the price is lower and equilibrium moves down along the supply curve.
d. be lower since the price is lower and equilibrium moves up along the supply curve.

Is increasing the entrepreneurial orientation of a firm always a good thing? ​

what is the various nation income meature

Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are:________
a. $49,750
b. $47,000
c. $49,000
d. $51,000

Sandoval needs to determine its year-end inventory. The warehouse contains 33,000 units, of which 4,300 were damaged by flood and are not sellable. Another 3,300 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 5,300 units at a consignee's location. How many units should Sandoval include in its year-end inventory

A satellite radio company is the sole supplier of a brand-new service providing commercial-free music that competes with existing free, broadcast-radio music delivered via antennas. The service is automatically activated for a 6-month introductory free-trial period, and is only available to people who purchase a new car with a specially equipped receiver. After the trial period, customers must call the company to activate and retain the service. Match each customer below to the radio company’s best profit-maximizing price strategy.

a. Ricardo explains that he is indifferent to the new service, and has not yet sampled many of the stations.
b. Joe, who explains that he needs music to sing along with while he commutes two hours each day for work.
c. Natasha, who says that she likes the service, but who commutes less than a half hour each day for work.

1. high price
2. medium price
3. low price

g A company has beginning inventory of 16 units at a cost of $24 each on February 1. On February 3, it purchases 34 units at $26 each. 22 units are sold on February 5. Using the FIFO periodic inventory method, what is the cost of the 22 units that are sold

On July 1, Sterns Co. acquired patent rights for $36,000. The patent has a useful life of 6 years and a legal life of 15 years.
Required:
Journalize the adjusting entry on December 31 to recognize the amortization. Refer to the Chart of Accounts for exact wording of account titles.

A company had net income of $43,000, net sales of $380,500, and average total assets of $220,000. Its profit margin and total asset turnover were, respectively:

a. 11.3%; 1.73
b. 11.3%; 19.5
c. 1.7%; 19.5
d. 1.7%; 11.3
d. 19.5%; 11.3

On August 1, Batson Company issued a 60-day note with a face amount of $49,800 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest calculations.) a. Determine the proceeds of the note assuming the note carries an interest rate of 8%. fill in the blank 1 b. Determine the proceeds of the note assuming the note is discounted at 8%.

Unilever has a subsidiary in Japan. The valuation of this MNC should
rise when an event causes the expected cash flows from Japan to ____
and when JPY is expected to ____.

Burlington Construction Company is considering selling excess machinery with a book value of $281,000 (original cost of $400,100 less accumulated depreciation of $119,100) for $277,400, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $284,300 for five years, after which it is expected to have no residual value. During the period of the lease, Burlington Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,000.

Required:
Prepare a differential analysis, dated January 3, 2012, to determine whether Sure-Bilt should lease (Alternative 1) or sell (Alternative 2) the machinery.

Journal Entry
On November 1, the company rented space to another tenant. A check in the amount of $9,000, representing three months' rent in advance, was received from the tenant on that date. The payment was recorded with a credit to the Unearned Rent account. Complete the necessary adjusting entry for December 31 by selecting the account names and dollar amounts from the drop-down menus.
Date Account Title Debit Credit
Dec. 31 selectAccounts ReceivableAccumulated DepreciationCashDepreciation ExpenseEquipmentEquipment ExpenseRent RevenueSalaries ExpenseSalaries PayableService RevenueSuppliesSupplies ExpensesUnearned Rent Revenue select300060009000 select300060009000
selectAccounts ReceivableAccumulated DepreciationCashDepreciation ExpenseEquipmentEquipment ExpenseRent RevenueSalaries ExpenseSalaries PayableService RevenueSuppliesSupplies ExpensesUnearned Rent Revenue select300060009000 select300060009000

how is corporate income tax similar to direct tax ? (2)​

Summarise the five (5) types of directors in incorporated companies.

Asonia Co. will pay a dividend of $4.95, $9.05, $11.90, and $13.65 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 9.2 percent on the company's stock, what is the stock price

Describe how you will operate your business

Slavery, as a business practice protected by state laws, provided unfair advantage against those employers not using slaves, and thus the economic incentives supported and sustained slavery within its sealed environment.
A. True
B. False

Galaxy Air, previously a no-growth firm, has two million shares outstanding. Until now, it consistently earned $20 million per year on its assets. (It has no debt and pays out all earnings as dividends. Its cost of capital is 10 percent.) Due to its newly appointed CEO, Galaxy Air is now able to squeeze out 1 percent annual growth by plowing back 5 percent of earnings. Calculate its stock price per share

Brown Co. issued $100 million of its 10% bonds on April 1, 2016, at 99 plus accrued interest. The bonds are dated January 1, 2016, and mature on December 31, 2035. Interest is payable semiannually on June 30 and December 31. What amount did Brown receive from the bond issuance?
a) $87.8 million
b) $99.0 million
c) $100.0 million
d) $101.5 million

Entries for Installment Note Transactions On the first day of the fiscal year, Shiller Company borrowed $63,000 by giving a five-year, 12% installment note to Soros Bank. The note requires annual payments of $17,773, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $7,560 and principal repayment of $10,213. Journalize the entries to record the following:

a. Issued the installment note for cash on the first day of the fiscal year.
b. Paid the first annual payment on the note. For a compound transaction, if an amount box does not require an entry, leave it blank.
c. Explain how the notes payable would be reported on the balance sheet at the end of the first year.

Cash Dividends on Common and Preferred Stock Lemon Inc. has the following information regarding its preferred and common stock: Preferred stock, $30 par, 12% cumulative; 300,000 shares authorized; 150,000 shares issued and outstanding Common stock, $2 par; 2,500,000 shares authorized; 1,200,000 shares issued; 1,000,000 outstanding As of December 31, 2019, Lemon was 3 years in arrears on its dividends. During 2020, Lemon declared and paid dividends. As a result, the common stockholders received dividends of $0.45 per share. Required: 1. What was the total amount of dividends declared and paid during 2020? Total dividends declared and paid $fill in the blank c3f04df87fe8040_1 2. During 2020, what journal entry was made at the date of declaration?

The following data are given for Stringer Company: Budgeted production 929 units Actual production 1,031 units Materials: Standard price per ounce $1.80 Standard ounces per completed unit 11 Actual ounces purchased and used in production 11,681 Actual price paid for materials $23,946 Labor: Standard hourly labor rate $14.47 per hour Standard hours allowed per completed unit 4.1 Actual labor hours worked 5,309.65 Actual total labor costs $80,972 Overhead: Actual and budgeted fixed overhead $1,040,000 Standard variable overhead rate $27.00 per standard labor hour Actual variable overhead costs $148,670 Overhead is applied on standard labor hours. Round your intermediate calculations and final answer to the nearest cent. The direct materials price variance is a.$2,920.25 favorable b.$7,300.62 unfavorable c.$7,300.62 favorable d.$2,920.25 unfavorable