J. Morgan and M. Halsted are partners who share income and loss in a 3:1 ratio. After several unprofitable periods, the two part

Answer:

d. $1,376.74

Explanation:

The NPV for Project X is calculated as follows:

Year Cash outflow/inflow Present value factor      Present value

0              -$10,000.00                         1                   -$10,000.00

1                 $6,000.00                   0.900901              $5,405.41

2                 $8,500.00                     0.811622              $6,898.79

NPV                                                                        $2,304.20

For Project Y, the NPV is:

Year Cash outflow/inflow Present value factor      Present value

0                -$10,000.00                       1                   -$10,000.00

1                   $4,600.00              0.900901             $4,144.14

2                   $4,600.00                  0.811622             $3,733.46

3                    $4,600.00                   0.731191                   $3,363.48

4                    $4,600.00                  0.658731             $3,030.16

Total                                                                        $4,271.25

The formula for calculating Equivalent Annual Annuity is expressed as:

C = r*(NPV)/(1-(1+r)-n)

For Project X, where NPV = $2304.20

using r = 11% and n = 2

Plugging in values into the formula gives us:

C = 11%*$2304.20/(1-(1+11%)−2

For Project Y, where NPV = $4271.25

using r = 11% and n = 4

Inserting the values into the formula, we find C = 11%*$4271.25/(1-(1+11%)−4

   = $1376.74

Thus, the more profitable project is Y, with an equivalent annual annuity of $1376.74.

Answer:

d.92 units.

Explanation:

Total units completed plus

the completed portion of ending WIP minus

the completed portion of beginning WIP

Total units completed and transferred 100

ending WIP of 10 units x 40% = 4 units

beginning inventory of 20 units x 60% complete equals (12) units

Equivalent Units for conversion 92

Answer:

38.76

Explanation:

Answer:

The solution is a. 14.33.

Explanation:

We employ the net present value (NPV) analysis to evaluate the two scenarios.

+ The NPV for the lifetime subscription is $(850)

+ The annual subscription has an NPV calculated as - 85 - [ 85/6% * [ 1 - 1.06^(-n) ], where n represents the years the subscriber is expected to live.

In order for the lifetime subscription to be more advantageous, its NPV must exceed that of the annual subscription, which gives us:

85 + [ 85/6% * [ 1 - 1.06^(-n) ] > 850 <=> 1 - 1.06^(-n) > 0.54 <=> 1.06^(-n) < 0.46 <=> -n < -13.33 <=> n > 13.33.

This indicates that the subscriber needs to live beyond 14.33 years (13.33 + 1 additional year for the next subscription) for the lifetime subscription to be the wiser choice.

Thus, option a is correct.