Solved

Use the Information for the Question(s)below

question 40

Multiple Choice

Use the information for the question(s) below.
The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years.The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0.
The cane manufacturing machine will result in sales of 2000 canes in year 1.Sales are estimated to grow by 10% per year each year through year three.The price per cane that Sisyphean will charge its customers is $18 each and is to remain constant.The canes have a manufacturing cost of $9 each.
Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts.It is estimated that the Sisyphean Corporation needs to hold 2% of its annual sales in cash,4% of its annual sales in accounts receivable,9% of its annual sales in inventory,and 5% of its annual sales in accounts payable.The firm is in the 21% tax bracket,and has a cost of capital of 10%.
-The required net working capital in the first year for the Sisyphean Corporation's project is closest to:

Definitions:

Compa-Ratios

A comparison ratio used in human resources to assess the relative pay level of an individual's salary to the midpoint of a salary range for their position.

Compa-Ratio

A metric that compares an individual's salary to the market average for similar positions.

Commissions

Payments made to employees or agents based on the sales or transactions they facilitate, typically a percentage of the sale value.

Merit Pay

A method of compensation where employees are paid based on their performance levels, often evaluated through a performance review process.