Answer:
limits the simultaneous development of new products.
Explanation:
Product screening serves to evaluate innovative concepts, strategies, and marketing trends to assess their practicality for business investments.
A variety of criteria are utilized to determine if the idea aligns with the company's goals, as well as to verify its potential for generating returns.
[[TAG_15]]Thus, product screening effectively reduces the number of product concepts being pursued concurrently.[[TAG_16]]
The title of the agreement is CALIFORNIA SALES CONTRACT AND CIVIL CODE. This agreement is predominantly utilized for acquiring land in California. The stipulations related to its use have made it less appealing for those looking to buy real estate in the state.
a. Determine the initial investment tied to replacing the current grinder with the new one.
Initial investment = cost of the new grinder + installation costs of the new grinder - after-tax revenue from selling the old grinder + increase in net working capital.
Cost of the new grinder = $105,000.
Cost to install the new grinder = $5,000.
After-tax revenue from the old grinder = $70,000 - ($70,000 - {$60,000 x (1 - 52%)] x 40%} = $70,000 - $16,480 = $53,520.
Increase in net working capital = $40,000 + $30,000 - $58,000 = $12,000.
Thus, initial investment = $105,000 + $5,000 - $53,520 + $12,000 = $68,480.
b. Assess the incremental operating cash inflows related to the new grinder installation. (Remember to factor in depreciation in year 6.)
New grinder cash flows:
Year 1 = [($43,000 - $22,000) x (1 - 40%)] + $22,000 = $34,600.
Year 2 = [($43,000 - $35,200) x (1 - 40%)] + $35,200 = $39,880.
Year 3 = [($43,000 - $21,120) x (1 - 40%)] + $21,120 = $34,248.
Year 4 = [($43,000 - $12,672) x (1 - 40%)] + $12,672 = $30,868.80.
Year 5 = [($43,000 - $12,672) x (1 - 40%)] + $12,672 + $18,000 (NWC) + $19,934.40 (after-tax salvage value) = $68,803.20.
Old grinder cash flows:
Year 1 = [($26,000 - $11,520) x (1 - 40%)] + $11,520 = $20,208.
Year 2 = [($24,000 - $6,912) x (1 - 40%)] + $6,912 = $15,964.80.
Year 3 = [($22,000 - $6,912) x (1 - 40%)] + $6,912 = $15,964.80.
Year 4 = [($20,000 - $3,456) x (1 - 40%)] + $3,456 = $13,382.40.
Year 5 = $18,000 x (1 - 40%) = $10,800.
Incremental cash flows:
Year 1 = $34,600 - $20,208 = $14,392.
Year 2 = $39,880 - $15,964.80 = $23,915.20.
Year 3 = $34,248 - $15,964.80 = $18,283.20.
Year 4 = $30,868.80 - $13,382.40 = $17,486.40.
Year 5 = $68,803.20 - $10,800 = $58,003.20.
c. Determine the expected terminal cash flow at the end of year 5 from the grinder replacement.
Terminal cash flow = regaining net working capital + after-tax salvage value = $18,000 + $19,934.40 = $37,934.40.
d. Show a timeline displaying the relevant cash flows for the proposed grinder replacement decision.
Year 0 = -$68,480.
Year 1 = $34,600.
Year 2 = $39,880.
Year 3 = $34,248.
Year 4 = $30,868.80.
Year 5 = $68,803.20.
Answer:
The calculations are presented below:
Explanation:
1. FIFO LIFO Average cost
Cost of goods sold
Beginning inventory $11,200 $11,200 $11,200
(400 units × $28)
Purchases $16,625 $16,625 $16,625
(475 units × 35)
Total goods available $27,825 $27,825 $27,825
Ending inventory $18,025 $15,575 $16,695
(525 units)
Cost of goods sold $9,800 $12,250 $11,130
Calculated using ending inventory = 475 × $35 + 50 × $28
FIFO = $18,025
For LIFO ending inventory: 400 × $28 + 125 × $35
Results in $15,575
Average cost is found by: $27,825 ÷ $875
Which equals 31.8
Ending inventory is calculated as 525 × 31.8
This leads to $16,695
2. FIFO LIFO Average
Sales
(307 × $50) $15,350 $15,350 $15,350
Cost of goods sold $9,800 $12,250 $11,130
Gross Profit $5,550 $3,100 $4,220
Expenses $1,680 $1,680 $1,680
Net income $3,870 $1,420 $2,540
3. FIFO ranks as 3
LIFO ranks as 2
Average ranks as 1
