QUESTION Calculate labor variances Johnson, Inc., manufactures lead crystal glasses. The standard direct labor time is 0.3 hour per glass, at a price of $13 per hour. The actual results for the production of 6,900 glasses were 0.2 hour per glass, at a price of $10 per hour. Requirement 1. Calculate the labor price variance […]
QUESTION Preparing an operating budget Tremont, Inc., sells tire rims. Its sales budget for the nine months ended September 30 follows: Quarter Ended 31-Mar 30-Jun 30-Sep ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION Why managers use budgets Consider the budget for any business. Requirement 1. List the three key benefits companies get from preparing the budget. The companies get the following benefits from preparing the budget:1. Planning: Budgeting helps in planning the activities to be performed by the business and describes the course of actions to be […]
QUESTION Using the payback and rate of return methods to make capital investment decisions Preston, Co., is considering acquiring a manufacturing plant. The purchase price is $1,100,000. The owners believe the plant will generate net cash inflows of $297,000 annually. It will have to be replaced in six years. Requirement 1. Use the payback method […]
QUESTION Product mix under production constraints Lifemaster produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Lifemaster could use all its available machine hours to produce either model. The two models are processed through the same production departments. Data for both models is as follows: Per Unit Deluxe Regular […]
QUESTION Comparing Investment Criteria Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION Calculating Payback Tulip Mania, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should they accept either of them? Year Cash Flow (A) Cash Flow (B) 0 ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION Using the NPV Rule Suppose we are asked to decide whether or not a new consumer product should be launched. Based on projected sales and costs, we expect that the cash flows over the five-year life of the project will be $2,000 in the first two years, $4,000 in the next two, and $5,000 […]
QUESTION The primary financial objective of corporate finance is usually taken to be the maximization of shareholder wealth. Discuss what other objectives may be important to a public limited company and whether such objectives are consistent with the primary objective of shareholder wealth maximisation. The object of the Corporate Finance is the acquisition and allocation […]
QUESTION Mr. Smith is presently concerned with investment of $ 1 million in either Microsoft or Apple. The two securities are called MSFT and AAPL and the relevant information for the securities are listed below MSFT AAPL Expected Return 12% 20% Standard Deviation 10% 18% The coefficient of correlation is 0.15. He has decided to […]
