The financial advantage amounts to $40,000. To determine the relevant variable cost, we can calculate it as follows: Unit variable cost = 130 + 20 = 150. The revenue from the special order (200 × $350) equals 70,000. The variable cost (200 × 150) is 30,000. Thus, the financial advantage totals 40,000. It's important to note that fixed manufacturing and selling costs have been excluded from this analysis since they remain constant regardless of the acceptance of the special order.
Answer: effective age, chronological age
Explanation:
Effective age refers to an approximation of how old a specific structure is, generally determined by its condition and functionality.
Chronological age relates to the total time elapsed from the construction date of the building until now.
The return rate for the asset in this scenario is calculated to be 6.14%. This is determined by evaluating the Internal Rate of Return for the given cash flows, as outlined in the provided information.
Answer:
- No, he will not accumulate sufficient funds to purchase his delivery truck after 6 years.
Explanation:
To determine how much money Earl Miller—the owner of the Papa Gino's franchise—will have available in 6 years, it's necessary to assess the worth of the $20,000 he plans to invest at a 5% interest rate compounded semiannually:
With semiannual interest: 5% / 2 = 0.05/2 = 0.025
Equation:
Here, r/n was calculated previously: r/n = 0.05/2 = 0.025; and t refers to the time in years: 6.
Thus, the future value of the investment would fall short of the truck's price, meaning
he will not be able to afford the delivery truck after 6 years.
