cantor's has been busy analyzing a new product. thus far, management has determined that an ocf of $218,200 will result in a zero net present value for the project, which is the minimum requirement for project acceptance. the fixed costs are $329,000 and the contribution margin per unit is $211. the company feels that it can realistically capture 2.5 percent of the 110,000 unit market for this product. the tax rate is 34 percent and the required rate of return is 11 percent. should the company develop the new product? why or why not?
Answers
Yes, the company should develop the new product because the project's NPV (Net Present Value) is greater than zero.
Cantor's has been busy analyzing a new product. Thus far, management has determined that an OCF of $218,200 will result in a zero net present value for the project, which is the minimum requirement for project acceptance.
The fixed costs are $329,000, and the contribution margin per unit is $211. The company feels that it can realistically capture 2.5% of the 110,000 unit market for this product.
The formula to calculate the OCF (Operating Cash Flow) is:
OCF = EBIT(1 - Tax rate) + Depreciation = [Revenues - Costs - Depreciation](1 - Tax rate) = [($211 x 110,000) - $329,000 - ($0 / 3)](1 - 0.34) = $1,056,900 x 0.66 = $698,574
The formula to calculate NPV (Net Present Value) is:
NPV = -Initial investment + PV of expected cash flows = -$4,812,500 + PV of OCFs = -$4,812,500 + [$698,574(PVIFA11%,5)] = -$4,812,500 + $2,546,283 = -$2,266,217
Since the NPV (Net Present Value) is less than zero, the company should not invest in this new product. However, the question states that the minimum requirement for project acceptance is a zero NPV, and the calculated NPV is greater than zero, the company should invest in this project.
Therefore, the company should develop the new product.
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Related Questions
Implicit costs are:A) regarded as costs by accountants but not by economistsB) payments that a firm makes to other firms or individuals who supply resources to itC) nonexpenditure costsD) costs that proportionately with output
Answers
Implicit costs are:
option C). non expenditure costs.
How Do Implicit Costs Work?
Any cost that has already occurred but isn't necessarily displayed or reported as a distinct item is known as an implicit cost. It stands for an opportunity cost that develops when a business devotes internal resources to a task without receiving any direct payment for the usage of such resources. This implies that there is never a financial transaction when a corporation allocates its resources since it always forfeits the chance to profit from the usage of those resources elsewhere. Simply put, there is an implicit cost associated with using an object as opposed to renting or purchasing it.
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1)a critical assumption of the net operation income approach to valuation is:
- that cost of equity remains constant regardless of changes in leverage
- that interest expense and taxes are included in the calculation
- that debt and equity levels remain unchanged
- that dividend increase at a constant rate
2)the following information relates to project x year cash flow ( 0 - 40 0000 ( 1 - 32 000) ( 2 - 24 000) ( 3 - 16 000). the firms cost of capital is 14 % what is the payback period for project x?
- 1.8 years
- 1.5 years
- 1.33 years
- 2 years
3)the length of time within which the investment made for the project will be recovered by the cash flows from the project is known as :
- span of returns
- payback period
- net present value
- period of returns
Answers
1. Option c is correct for critical assumption 2. Payback period for Project X is 2 years. 3.The cash flows from the project is known as the payback period Option b is correct.
1. The critical assumption of the net operating income approach to valuation is that debt and equity levels remain unchanged. This assumption implies that the capital structure of the company remains constant, and any changes in the valuation are solely driven by changes in the net operating income.
2. To calculate the payback period for Project X, we need to determine the time it takes to recover the initial investment. By examining the cash flows provided, we can see that the initial investment of $400,000 is recovered in Year 2 when the cash flow is $24,000. Therefore, the payback period for Project X is 2 years.
3. The length of time within which the investment made for the project will be recovered by the cash flows from the project is known as the payback period. This period represents the time it takes for the cumulative cash flows to equal or exceed the initial investment. It is a measure of liquidity and risk associated with the project, as it indicates how quickly the initial investment will be recouped.
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PLEASE HELP QUICK!!!
Which of the following is an advantage of buying your home over renting?
(1 point)
O You do not have to worry about the housing market in your area.
O The amount you pay each month is set by the terms of your mortgage.
O If something breaks, you have to fix it or pay to have it fixed.
O Your mortgage payments will far exceed the value of your home.
Answers
Answer:
The amount you pay each month is set by the terms of your mortgage.
Explanation:
connexus
what is the primary cause of failure for strategic initiatives?
Answers
Strategic initiatives are the ways through which a company translates its goals, objectives and visions into practice.
Raising of brand awareness, Launch of customer-facing retail outlets, Establishment of online channel for sales of products are examples of Strategic initiatives in a company.The major reason for failure of strategic initiatives is the inability of decision-makers in a company to understand the relevance and how to measure progress.Therefore, the primary cause of failure for strategic initiatives is ignorance about monitoring of progress.
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Answer:
Improper execution
Explanation:
True or False? A Mastercard credit card is an example of an open-end credit account.
Answers
Answer:
True
Explanation:
Using a credit card issued by a store, a bank card such as VISA or Mastercard, or overdraft protection are examples of open-end credit.Unless you pay off the debt in full each month, you will have to pay a high-rate of interest or other kinds of finance charges for the use of credit.
Please help!!!
Drag each label to the correct location on the image.
Match the descriptions to the possibility of being addressed by a Trial Balance.
can detect the accuracy
of the accounting process
can help prepare the
income statement
can help check whether the
debit side is equal to the
credit side
can help check whether a
particular transaction has
been completely omitted
helps serve as a proof of
the application of the
double-entry system
Answers
According to given Image the all the scenario are possible of being addressed by a Trial Balance
Give explanations for how a Trial Balance might be addressed
Can determine whether the accounting procedure is accurate: PossibleMay aid in the income statement's preparation: PossibleMay assist in determining whether the debit and credit sides are equal: PossibleCan assist in determining whether a specific transaction has been entirely missed: PossibleAids in providing evidence of the double-entry system's use: PossibleWhat is trial balance?
A Trial Balance is a financial statement that lists all the general ledger accounts and their balances at a specific point in time.
It serves as a tool to ensure that the total debits equal the total credits in the accounting system and helps to detect errors and discrepancies in the accounting records.
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why do your feet stink
Answers
Answer:
feet become smelly if sweat soaks into shoes and they don't dry before you wear them again. Bacteria on the skin break down sweat as it comes from the pores.
Explain the relationship of savings, investing and risk to that of an investment. How is each term integral to investing wisely?
Answers
Answer:
The savings are part of the unused amount, so it doesn’t exceed the cost. Investing is a way to create capital in addition to state security and thus increase cash flow.
Explanation:
Why do large corporations want to become more like small businesses?
Answers
Answer:
Many large corporations want to become more like small businesses because they want to make their firm more flexible, resourceful, innovative, and competitive. ... For businesses based off the internet, they are able to adapt to market changes quickly.
Green et al. (2005) estimate the supply and demand curves for California processed tomatoes. The supply function is: In(Qs) - 0.200 +0.550 In(p), where Q is the quantity of processing tomatoes in millions of tons per year and p is the price in dollars per ton. The demand function is: In(Od) 2.600-0.200 In(p)0.150 In(pt), where pt is the price of tomato paste (which is what processing tomatoes are used to produce) in dollars per ton. Suppose pt $130. Determine how the equilibrium price and quantity of processing tomatoes change if the price of tomato paste rises by 22%. If the price of tomato paste rises by 22%, then the equilibrium price will V by $. (Enter a numeric response using a real number rounded to two decimal places.)
Answers
If the price of tomato paste rises by 22%, the equilibrium price of processing tomatoes will decrease by $1.96 and the equilibrium quantity of processing tomatoes will decrease by 0.63 million tons per year.
The price of tomato paste is a substitute for processing tomatoes. If the price of tomato paste rises by 22%, the demand for processing tomatoes will decrease.
This will cause the equilibrium price of processing tomatoes to decrease. The equilibrium quantity of processing tomatoes will also decrease.
The equilibrium price of processing tomatoes will decrease by $1.96. This is because the demand function for processing tomatoes is negatively sloped.
When the price of tomato paste rises, the demand for processing tomatoes decreases, which causes the equilibrium price of processing tomatoes to decrease.
The equilibrium quantity of processing tomatoes will decrease by 0.63 million tons per year. This is because the supply function for processing tomatoes is positively sloped.
When the price of tomato paste rises, the supply of processing tomatoes increases, which causes the equilibrium quantity of processing tomatoes to decrease.
In conclusion, if the price of tomato paste rises by 22%, the equilibrium price of processing tomatoes will decrease by $1.96 and the equilibrium quantity of processing tomatoes will decrease by 0.63 million tons per year.
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Economics is best defined as the study of how societies deal with.a. True
b. False
Answers
False, Economics is the look at of ways people and societies pick to allocate scarce sources.
What is Economics ?Economics refers to the study of how individuals and societies allocate scarce sources. Economics is the study of scarcity and its effects on the use of resources, the production of goods and services, the growth of output and wealth over time, and many other complex issues essential to society. Its four main economic concepts — scarcity, supply and demand, costs and benefits, and incentives — help explain many of the decisions people make. Economics is a discipline that combines political science, sociology, psychology, and history. Studying economics gives you a toolkit of skills, approaches, and ways of thinking that you can apply to a variety of problems.To learn more about Economics from the given link:
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Steiner company's average days in inventory has decreased during 2016 as compared to the prior year. from this information, we can conclude that steiner (select all that apply.) multiple select question. is selling its inventory faster. is selling its inventory slower. has a lower inventory turnover ratio. has a higher inventory turnover ratio.
Answers
From the given information, we can conclude that Steiner has a higher inventory turnover ratio and is selling its inventory faster.
What is meant by inventory?Inventory refers to all the items, products, and supplies that a business keeps on hand in the hope of reselling them for a profit. Hence defining the size, location, and shape of stocked commodities is essentially the major focus of inventory management.
Inventory, also known as trading stock, refers to the products and materials that a company buys, makes, or creates with the intention of selling, exchanging, or making more of those products. A company's balance sheet designates it as a current asset. Raw materials, finished commodities, and work-in-progress are the three different categories of inventory.
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What are the 5 advantages of writing out a budget?
Answers
Explanation:
Provides You 100% Control Over Your Money.
Let's You Track Your Financial Goals.
Budgeting Will Open Your Eyes.
Will Help Organize Your Spending.
Will Help Create a Cushion for Unexpected Expenses.
Budgeting Makes Talking About Finances Much Easier.
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Why does the united states have limited to no trade with countries like cuba and venezuela?.
Answers
On September 4, 1961, partly in response, Congress handed the Foreign Assistance Act, a Cold War Act (among many different measures) that prohibited useful resource to Cuba and approved the President to impose a whole trade embargo towards Cuba.
What is the alternate relationship between the US and Cuba?U.S. diplomatic illustration in Cuba is handled with the aid of the United States Embassy in Havana, and there is a comparable Cuban Embassy in Washington, D.C. The United States, however, continues to preserve its commercial, economic, and economic embargo, making it unlawful for U.S. corporations to do enterprise with Cuba.
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https://brainly.com/question/25862883#SPJ4She discovers that her local power company has a program where she can get on the job experience and go to school. What kind of program is this
Answers
This program sounds like a type of apprenticeship or co-op program.
Apprenticeship programs are typically offered by companies in skilled trades such as construction, electrical, and mechanical work, and provide on-the-job training and education to individuals seeking to learn a trade and gain practical experience. In this case, the power company offers such an opportunity. This program allows the individual to work for the company while also attending school to gain knowledge in their field of interest. It is a great way for someone to gain experience and develop skills in their chosen field, while also earning money and potentially getting a foot in the door for a full-time job.
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A graph of the rate of inflation in the United States over the twentieth century shows: a constant rate of inflation in the first half of the century followed by an upward trend in the second half an overall upward trend interrupted by a large downturn in the 1930s. O a relatively steady, positive level throughout the century except for deflation in the 1930s. some periods of deflation mixed with mostly positive rates of inflation before 1955 but only positive rates of inflation after 1955.
Answers
A graph of the rate of inflation in the United States over the twentieth century shows: An overall upward trend was broken by a severe downturn in the 1930s.
A graph of the rate of inflation in the United States over the twentieth century would show an overall upward trend interrupted by a large downturn in the 1930s, also known as the Great Depression. In the first half of the century, there was a relatively steady, positive level throughout the century except for deflation in the 1930s. However, the rate of inflation began to rise in the post-World War II period, reaching high levels in the 1970s before moderating in the 1980s and 1990s. The Great Recession of 2008 had an effect on the inflation rate as well.Inflation is a measure of the rate at which the general level of prices for goods and services rises, resulting in a decline in purchasing power.
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hai brought 6 pears fo 3.60 how much did each pear cost?
Answers
Answer: $0.6
Explanation:
3.6/6 is 0.6
In most firms, the group that addresses the cost and performance information companies need to make good business decisions isA.consumers.B.scientists and engineers.C.marketing.D.accounting
Answers
In most firms, the group that addresses the cost and performance information companies need to make good business decisions is accounting.
The accounting department is responsible for preparing financial statements, analyzing financial information, and providing information to management for decision-making purposes. The cost and performance information provided by accounting includes cost data, budgeting information, variance analysis, and other financial information that is critical for management to make informed decisions about operations, pricing, and investments. Additionally, accounting is responsible for ensuring that financial transactions are recorded accurately and in compliance with accounting principles and regulations. This function is important for maintaining the credibility of financial information and protecting the interests of investors and other stakeholders. Overall, accounting is a crucial function within a firm that provides the financial information necessary for effective decision making.
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Beachfront resorts have an inelastic supply, and automobiles have an elastic supply. Suppose that a rise in population doubles the demand for both products (that is, the quantity demanded, at each price, is twice what it was)a. What happens to the equilibrium price and quantity, in each market?b. Which product experiences a larger change in price?c. Which product experiences a larger change in quantity?d. What happens to total consumer spending, on each product?
Answers
Answer:
What happens to the equilibrium price and quantity, in each market?
Beachfronts have inelastic supply, which means that their supply is fixed no matter how large the demand. The population increase would simply increase the price of renting a beachfront.
Automobiles have elastic supply, their supply responds to demand. At fist, the population increase would cause a price hike, but in the long-run, supply would meet demand and reach a new equilibrium.
b. Which product experiences a larger change in price?
Beachfronts experience a larger change because their price goes up, and stays above the previous equilibrium price.
c. Which product experiences a larger change in quantity?
Automobiles, simply because they do have a elastic supply that can increase to meet the new larger demand. Beachfront supply is inelastic and will stay the same no matter how much the population and demand grows.
d. What happens to total consumer spending, on each product?
Total consumer spending on beachfronts will be very high because of the very high prices.
Consumer spending in automobiles will be higher than before because of the higher demand, but not as high as consumer spending on beachfront, because automobile supply will also grow, bringing down prices to a similar point to the previous equilibrium price.
The ___ is determined by a formula and represents the amount of college costs for which a family is responsible.
Answers
The Expected Family Contribution (EFC) is determined by a formula and represents the amount of college costs for which a family is responsible.
What is Expected Family Contribution (EFC)?Expected Family Contribution (EFC) is the quantity that the federal government uses to calculate a student's financial need for higher education. A student's EFC is calculated from the family's income and asset information provided on the Free Application for Federal Student Aid (FAFSA).
The EFC is a dollar amount that indicates how much money a family is expected to contribute to the student's higher education expenses. The FAFSA, which is used to apply for financial aid for college, is a critical application for students who want to apply for financial aid. The EFC is calculated using the information on this application, which considers a family's income and assets.
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what are the compromises when crating the constitution
Answers
Answer:
The three major compromises were the Great Compromise, the Three-Fifths Compromise, and the Electoral College. The Great Compromise settled matters of representation in the federal government.
it should be right if not sorry
.
when a licensed sales associate is working for a broker as an employee, which of the following is not a characteristic of an employee
Answers
when a licensed sales associate is working for a broker as an employee, than option who is not correct is The broker may not require sales associates to attend sales meetings.
A LICENSED SALES AGENT: WHAT IS IT?Become a registered sales agent if you have a strong work ethic and a passion for assisting others. Licensed sales representatives make contact with potential customers to market products from a variety of product categories. Through licensed sales representatives, insurance may be marketed to consumers or corporations. As a part of the wellness group, these brokers also provide insurance.
For this position, typically, a bachelor's degree is required. Experienced agents with a university degree may be able to move into roles in risk management, as actuaries, or in other fields requiring post-secondary education. Having a background in business or economics can also be quite advantageous for agents. Licensed sales representatives provide a range of insurance products, including property, casualty, disability.
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Who do you want to win? First person get Brainlest
Answers
Manufacturing machinery must be maintained to continue working. Who is responsible for this?
Industrial machinery mechanics
Line assemblers
Manufacturing engineers
Product inspectors
Answers
Answer: Industrial machinery mechanics
Explanation: took exam and got 100
Answer:
A
Explanation:
_________ is the removal of items from a store with the intention of not paying for them.
a. shrinkage
b. shoplifting
c. control
d. none of the above
Answers
Answer: lol that should be shoplifting
A company that uses the perpetual inventory system sold goods to a customer for cash $4,100. The cost sold was $900. Which of the following journal entries correctly records this transactionA. Accounts Receivable 4,100 Cash 4,100Cost of Goods Sold 900 Merchandise inventory 900B. Cost of Goods Sold 4,100 Sales Revenue 4,100C. Cash 4,100 Sales Revenue 4,100Cost of Goods Sold 900 Merchandise Inventory 900D. Merchandise Inventory 4,100 Sales Revenue 4,100
Answers
The correct journal entry to record this transaction under perpetual inventory system is option C: Cash $4,100, Sales Revenue $4,100, Cost of Goods Sold $900, and Merchandise Inventory $900.
Because the company is using the perpetual inventory system, the inventory account should be continuously updated to reflect the current level of inventory.
When the company sells goods to a customer for cash, the cash account is increased by the amount of the sale ($4,100) and the sales revenue account is also increased by the same amount. The cost of goods sold account is increased by the cost of the goods that were sold ($900) and the merchandise inventory account is decreased by the same amount to reflect the fact that the goods are no longer in inventory.
Therefore, the correct journal entry is:
Cash $4,100
Sales Revenue $4,100
Cost of Goods Sold $900
Merchandise Inventory $900
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Which characteristic of cash makes it especially susceptible to theft and
fraud?
Answers
The characteristic of cash makes it especially susceptible to theft and fraud is a liquidity
What is liquidity?Liquidity makes cash susceptible this is because it can easily be used to purchase asset.
Money can be liquidated by converting it into goods or materials for human use.
Therefore, The characteristic of cash makes it especially susceptible to theft and fraud is a liquidity
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Answer: Its lack of a paper trail
Explanation: trust me on this i just did the test
what are the positive impacts of Title VII of the Civil Rights Act of 1964 on US companies. How did this historic change in US law benefit companies?
Answers
Answer:
The Civil Rights Act of 1964 hastened the end of legal Jim Crow. It secured African Americans equal access to restaurants, transportation, and other public facilities. It enabled blacks, women, and other minorities to break down barriers in the workplace.
Explanation:
what is stopping producers of fruits and veggies to use marketing techniques similar to large food processing and manufacturing organizations such as pepsico?
Answers
Extending regenerative farming practices, a collection of methods that enhance and restore ecosystems with a focus on improving soil health and fertility, lowering carbon emissions, improving watershed management, increasing biodiversity, and enhancing farmer livelihoods, is a crucial component of positive agriculture.
What is Positive Agriculture Goals?In order to achieve our long-term goal of a sustainable agricultural supply chain, we have established standards for both our internal operations and our supply chain. By 2020, we want to sustainably procure for our company potatoes, whole corn, oats, oranges, palm oil, and cane sugar. By 2025, we want to do the same for additional important crops, like vegetable oils that we don't buy directly from farmers. With 2030 aims to obtain crops and ingredients in a way that accelerates regenerative agriculture and strengthens agricultural communities, we announced a new, impact-driven Positive Agriculture ambition in 2021 to build on the progress made.Adopting regenerative farming methods on 7 million acres1, or roughly 100% of the land used globally to produce our products' key crops and ingredients. By 2030, greenhouse gas (GHG) emissions are anticipated to be reduced by at least 3 million tons as a result of these efforts. We will continue to work with farmers to adopt practices that improve and restore ecosystems while advancing the progress made with the Sustainable Farming Program (SFP) over the past almost ten years.100% of essential ingredients are sourced sustainably2, and this extends to key crops from outside sources, such as grains and vegetable oils, in addition to our own grower-sourced products (potatoes, whole corn, and oats).Enhancing the livelihoods of more than 250,000 people in our agricultural supply chain and communities, including the economic empowerment of women. We will concentrate our efforts on the most vulnerable farming communities connected to our global value chain, including smallholder farmers and farm workers, women, and farmers from underrepresented groups. We will continue to advance this objective through a variety of partnerships, including those with the German Agency for International Cooperation, the Inter-American Development Bank, CARE, the National FFA Organization, and the United States Agency for International Development.To Learn more About positive agriculture refer to :
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To which level of granularity does the O*NET OnLine database sort its information?
Answers
The O*NET OnLine database is known for its vast collection of occupational information that is designed to help job seekers, students, and employers make informed decisions about careers.
At the highest level, O*NET groups related occupations into 24 major categories, such as Management, Healthcare, and Construction. These categories are then further divided into more specific subcategories, such as Marketing and Sales or Personal Care and Service.
At the next level of granularity, O*NET provides detailed information on individual occupations, including job tasks, skills, and knowledge required for the job, as well as the level of education and experience typically required. This information is updated regularly and provides a comprehensive overview of each occupation.
Additionally, the O*NET database also offers information on industries, job outlook, and wage data. This information is organized to provide a clear understanding of the job market and the opportunities available to job seekers and employers alike.
Overall, the O*NET OnLine database provides detailed information on a variety of career options, allowing users to explore their interests and identify potential career paths with the level of granularity that suits their needs.
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