Ac505 Capital Budgeting Prob.

SAMPLE Capital Budgeting problem info: hail of unused equipment $200,000 evaluate life of equipment in classs5 constitution value in 5 years $40,000 Life exercise - number of potbellys 5,500,000 yearly widening or purchase ineluctably 1,100,000 Number of workers needed3 yearly hours to be worked per employee2000 cabbage per hour for employees $12.00 one-year health benefits per employee $2,500 Other one-year benefits per employee-% of bribe18% Cost of raw materials per idler $0.25 Other shifting merchandise cost per can $0.05 be to purchase cans - per can $0.

45 call for tempo of return12% levy outrank35% MakePurchase Cost to produce one-year cost of right away material: Need of 1,000,000 cans per year $330,000 Annual cost of curb labor for new employees: struggle $72,000 health benefits $7,500 Other benefits $12,960 incline wages and benefits $92,460 make out annual production costs $422,460 Annual cost to purchase cans $495,000 segment 1 Cash fertilises over the life of the project Before evaluate taxation EffectAfter Tax token measuring rod join Annual cash nest egg (make vs buy) $72,540 0.65 $47,151 * Tax result on Annual Cash savings is 1 - assess rate Tax savings due to wear and tear $32,000 0.35 $11,200 * Tax effect on derogation is the tax rate Total annual cash flow $58,351.00 Part 2 fee Period $200,000 / $58,351 = 3.4years Part 3 Annual rate of return explanation income as result of decreased costs Annual cash savings (before tax effect) $72,540 Less wear and tear $32,000...If you want to get a full essay, order it on our website: Orderessay

If you want to get a full information about our service, visit our page: How it works.