Holly uses a perpetual inventory system. Holly sells $3,500 of blue jeans. The customer later brings $420 of blue jeans back to

Answer:

a. What is the initial investment at t=0?

• -$90,000

b. What is the Cash Flow at year 1?

• $33,950

c. What is the Cash Flow at year 3?

• $40,270

d. What is NPV?

• $1,788.50

Explanation:

Initial investment amounts to $90,000

Annual depreciation calculated using straight-line depreciation method = $90,000 / 3 = $30,000

Year 1 cash flow = [($40,000 - $5,000 - $30,000) × 0.79] + $30,000 = $33,950

Year 2 cash flow = [($45,000 - $6,000 - $30,000) × 0.79] + $30,000 = $37,110

Year 3 cash flow = [($50,000 - $7,000 - $30,000) × 0.79] + $30,000 = $40,270

Using an Excel spreadsheet, I calculated the NPV = $1,788.50

people initiate an underground market to peddle soup and provide delivery services for it. we recognize that the winter conditions, particularly snow, lead to highway closures, disrupting transport. If shops are shut, this would heighten demand while the supply dwindles. Should the government impose a temporary price cap of $1 on soup, down from an equilibrium price of $5, I believe individuals will attempt to hoard supplies owing to the significant demand paired with scarce availability, prompting the emergence of a black market for soup sales and deliveries.

Answer:

a. $21 per machine hour

b. $4,855

Explanation:

a. The calculation for the plantwide predetermined overhead rate is detailed below:

Plantwide predetermined overhead rate formula is as follows:

= Variable overhead cost rate for each machine hour + Fixed overhead cost rate for each machine hour

= $2 + (Fixed manufacturing overhead cost ÷ Estimated machine hours)

= $2 + ($4,275,000 ÷  225,000 machine hours)

= $2 + $19

= $21 per machine hour

b. The total manufacturing cost assigned is

Particulars Amount

Direct materials $1,702

Direct labor $1,221

Variable manufacturing overhead $168

(84 × $2)

Total variable cost $3,091

Add:

Fixed manufacturing overhead

(84 × $21) $1,764

Total manufacturing cost assigned

to Job P90 $4,855

Answer:

1. The ending carrying value for 2016 amounts to the legal fee for application, totaling $20,000.

The ending carrying value for 2017 equals the legal cost from 2016 plus the legal fees for 2017, calculated as $20,000 + $8,000 = $28,000.

2. The company should refrain from amortizing the trade name since it was not impaired in either 2016 or 2017. Amortization of the trade name can occur if its useful lifespan is known, and the company decides it will cease using the trade name; in that case, it will be amortized over its useful duration.

Answer:

The annual total economic cost amounts to $40,500

Explanation:

This figure is derived from adding:

* The lost opportunity cost from Greg leaving his current job, equating to his salary of $40,000.

* The opportunity cost from forfeiting the interest from $10,000 in savings, now designated for equipment purchase, calculated as: 10,000 * the current savings interest rate = 10,000 * 5% = $500 (the actual equipment cost is not included since he could resell it for the same amount he spent).

=> Therefore, the total annual economic cost is $40,000 + $500 = $40,500.