Your company is upgrading the breakroom and kitchen. It is going to include an expresso machine, a fridge with compartments for each employee, a sink, microwave, toaster oven, tables chairs, a rock wall, snacks for everyone, and maybe some other bells and whistles. Your managers think that by updating this area employees will not take as long of lunches. They understand this purchase will be at a cost. You are tasked with considering two different options and presenting them to management. Use a 5% interest rate. Walmart Kit Target First Cost $40,000 $65,000Annual Maintenance Cost $10,000 $12,000Salvage Value $12,000 $25,000Life Years 3 6 a. Using NPW (Net Present Worth Analysis) analysis determine which kitchen kit you should chooseb. Using EUAW (Equivalent Uniform Annual Worth) analysis determine which kitchen kit you should choose. C. You really want the Target kit because it looks nicer and has more bells and whistles. You are willing to keep these products around for longer and therefore extend the lives of these products. Perform the analysis to show that the Target option is the better choice. d. Now from your analysis in part b think about how ethical presenting this information to management would be. Write 2-3 sentences about how you would present this information in a way that showed your bias. You will be graded on your ability to consider two options in an ethical comparison and how you perceive your bias.

Answers

Answer 1
Answer:

Answer:

1. In a Year 20,367 20,017

2. In a Year 21,333 21,917

3. In the case of NPW analysis Selected Target is best option because it is the better and cheaper investment while EUAM analysis states Walmart kit is better option,

4.Target is the best option because the cost difference is only around $600 which will last for 6 Years while in walmart case we will need to replace all the furniture in 3 Years .

Explanation:

1. Using NPW Analysis

Walmart Kit Target

Intial Cost 40000 65000

AMC 10000 12000

Salvage Value 12000 25000

Life Years 3 6

Total Cost

Intial Cost 40000 65000

Less Salvage 12000 25000

Balance 28000 40000

5% Interest 6000 19500

AMC PV 2.71 5.05

Amc 27100 60600

Total Cost 61100 120100

In a Year 20,367 20,017

2. Using EUAW Analysis

Walmart Kit

Target

Intial Cost 40000 65000

AMC 10000 12000

Salvage Value 12000 25000

Life Years 3 6

Total Cost

Intial Cost 40000 65000

Less Salvage 12000 25000

Balance 28000 40000

5% Interest 6000 19500

AMC 30000 72000

Total 64000 131500

In a Year 21,333 21,917

In the case of NPW analysis Selected Target is best option because it is the better and cheaper investment while EUAM analysis states Walmart kit is better option,

Target is the best option because the cost difference is only around $600 which will last for 6 Years while in walmart case we will need to replace all the furniture in 3 Years .

Hence Target product will be the best option we would advice the management to go for.

Answer 2
Answer:

Final answer:

To determine which kitchen kit to choose, you can use NPW (Net Present Worth) analysis and EUAW (Equivalent Uniform Annual Worth) analysis. In NPW analysis, calculate the present worth of each option by subtracting the present value of the annual maintenance cost from the sum of the present value of the salvage value and the present value of the first cost. In EUAW analysis, divide the NPW by the present worth factor to calculate the equivalent uniform annual worth. You can extend the analysis to show the EUAW for an extended life of the products. Present the information ethically and transparently, addressing your bias towards the Target kit and presenting the analysis results objectively.

Explanation:

a. In order to determine which kitchen kit to choose using NPW analysis, we need to calculate the present worth of each option. The present worth is calculated by subtracting the present value of the annual maintenance cost from the sum of the present value of the salvage value and the present value of the first cost. You can use the formula: NPW = (-FC + PV(SV) + PV(AMC)) / (1 + i)^n, where FC is the first cost, PV(SV) is the present value of the salvage value, PV(AMC) is the present value of the annual maintenance cost, i is the interest rate, and n is the number of years.

b. To determine which kitchen kit to choose using EUAW analysis, we need to calculate the equivalent uniform annual worth of each option. The EUAW is calculated by dividing the NPW by the present worth factor. You can use the formula: EUAW = NPW / Present Worth Factor, where NPW is the net present worth, and the Present Worth Factor is calculated using the formula: Present Worth Factor = (1 - (1 + i)^-n) / i.

c. To show that the Target option is the better choice, you can extend the analysis from part b and calculate the EUAW for an extended life of the products. Simply substitute the new number of years into the formula and compare the EUAWs of the two options.

d. Since you have a bias towards the Target kit, it is important to present the information ethically and transparently. You can start by explaining your bias and personal preference, and then present the analysis results objectively, showcasing the financial aspects and consequences of each option. It is crucial to provide all the necessary information and allow management to make an informed decision based on the facts presented.

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When an interviewer introduces a new topic area, she is using aA trick question
B secondary question
C turn-taking question
D primary question

Answers

Answer:

D. Primary question

When projecting future cash flows of an investment​ ________. A. the initial investment is a significant cash outflow that is treated separately from all other cash flows B. cash flows include depreciation C. cash inflows and outflows are treated​ separately, rather than being netted together D. cash flows are projected by accounting personnel without considering input from other departments

Answers

A. The initial investment is a significant cash outflow that is treated separately from all other cash flows

Bob lives in San Diego and runs a business that sells boats. In an average year, he receives $793,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $430,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $15,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Bob does not operate this boat business, he can work as a financial advisor, receive an annual salary of $50,000 with no additional monetary costs, and rent out his showroom at the $15,000 per year rate. No other costs are incurred in running this boat business.Identify each of Charles's costs in the following table as either an implicit cost or an explicit cost of selling guitars.

a. The wages and utility bills that Charles pays
b. The wholesale cost for the guitars that Charles pays the manufacturer
c. The rental income Charles could receive if he chose to rent out his showroom
d. The salary Charles could earn if he worked as a financial advisor

Answers

Answer:

Explanation:

Explicit Costs refers to costs that involve an immediate outlay of cash from the business and it is recorded and reported to the management.

Implicit Cost refer to the cost which the company had foregone while employing the alternative course of action and is neither recorded nor reported to the management of the company.

a. The wages and utility bills that Charles pays

Identification: Explicit Cost

b. The wholesale cost for the guitars that Charles pays the manufacturer

Identification: Explicit Cost

c. The rental income Charles could receive if he chose to rent out his showroom

Identification:  Implicit Cost

d. The salary Charles could earn if he worked as a financial advisor

Identification:  Implicit Cost

True Fit Shoe Company makes loafers. During the most recent year. True Fit incurred total manufacturing costs of $24.500.000. Of this amount. $3,000,000 was direct materials used and $16, 800,000 was direct labor. Beginning balances for the year were Raw Materials Inventory. $900,000. Work-in-Process Inventory. $600,000; and Finished Goods Inventory. $1, 300,000. At the end of the year, balances were Raw Materials inventory. $800,000; Work-in-Process Inventory. $1, 700,000; and Finished Goods inventory. $390,000.Requirements

Analyze the inventory accounts to determine:

1. Cost of raw materials purchased during the year.
2. Cost of goods manufactured for the year.
3. Cost of goods sold for the year.
4. Cost of raw materials purchased during the year.

Answers

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

True Fit incurred total manufacturing costs of $24.500.000. Of this amount. $3,000,000 was direct materials used and $16, 800,000 was direct labor. Beginning balances for the year were Raw Materials Inventory. $900,000. Work-in-Process Inventory. $600,000; and Finished Goods Inventory. $1, 300,000. At the end of the year, balances were Raw Materials inventory. $800,000; Work-in-Process Inventory. $1, 700,000; and Finished Goods inventory. $390,000.

1) Raw material used= beginning inventory + purchases - ending inventory

3,000,000= 900,000 + purchases - 800,000

2,900,000= purchases

2) cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 600,000 + 24,500,000 - 1,700,000= $23,400,000

3) COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 1,300,000 + 23,400,000 - 390,000= $24,310,000

Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PB0 report from the actuary. The following information was included in the report: ending PBO, $110,000 benefits paid to retirees. $10,000, interest cost, $7,200. The discount rate applied by the actuary was 8%. What was the beginning PBO? A) $100,000
B) $112,000.
C) $90,000.
D) $107,200.

Answers

Answer:

C) $90,000

Explanation:

Beginning PBO = Interest cost/Discount rate =

Beginning PBO = $7,200/8%

Beginning PBO = $90,000

The Miller Company earned $133,000 of revenue on account during Year 2. There was no beginning balance in the accounts receivable and allowance accounts. During Year 2, Miller collected $87,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 3% of its sales on account. The net realizable value of Miller's receivables at the end of Year 2 was:

Answers

Answer:

The net realizable value of Miller's receivables at the end of Year 2 was:  $42,010

Explanation:

Open a Trade Receivable Account as follows :

Debits :

Revenue $133,000

Totals      $133,000

Credits:

Cash        $87,000

Balance   $46,000

Totals      $133,000

Note that Allowance for Doubtful debts is estimated at 3% of the Company`s Sales on Account

Allowance for Doubtful debts = $133,000 × 3%

                                                 = $ 3, 990

Net realizable value of Miller's receivables

Trade Receivable Balance                $46,000

Less Allowance for Doubtful Debts    $3,990

Trade Receivables                              $42,010

Final answer:

The net realizable value of Miller Company's receivables at the end of Year 2 is calculated by estimating bad debt and subtracting it from the ending accounts receivable. The estimated bad debt is 3% of sales, leading to a net realizable value of $42,010.

Explanation:

The question revolves around calculating the net realizable value of accounts receivable for the Miller Company at the end of Year 2. First, we need to calculate the estimated bad debt. The company estimates that 3% of its sales on account will be uncollectible, which equates to $133,000 * 0.03 = $3,990. After subtracting the cash collected from receivables, $133,000 - $87,000, we get ending accounts receivable of $46,000. Finally, we deduct the estimated bad debts from ending accounts receivable to obtain the net realizable value, which is $46,000 - $3,990 = $42,010.

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