A Company Is Trying to Decide Which of Two New

question 59

Essay

A company is trying to decide which of two new product lines to introduce in the coming year. The company requires a 12% return on investment. The predicted revenue and cost data for each product line follows:
$$\begin{array} { l | l | l } &{ \text { Product A } } & \underline { \text { Product B } } \\\hline \text { Unit sales } & 25,000 & 20,000 \\\hline \text { Unit sales price } & \$ 30 & \$ 30 \\\hline \text { Direct materials } & \$ 15,000 & \$ 8,000 \\\hline \text { Direct labor } & \$ 120,000 & \$ 80,000 \\\hline \text { Other cash operating expenses } & \$ 30,000 & \$ 25,000 \\\hline \text { New equipment costs } & \$ 2,500,000 & \$ 1,500,000 \\\hline \text { Estimated useful life (no salvage) } & 5 \text { years } & 5 \text { years }\end{array}$$ The company has a 30% tax rate and it uses the straight-line depreciation method. The present value of an annuity of $1 for 5 years at 12% is 3.6048. Compute the net present value for each piece of equipment under each of the two product lines. Which, if either of these two investments is acceptable?

Identify causes and management strategies for altered stool characteristics and fecal occult blood.

Implement strategies to prevent and manage complications related to bowel movements and interventions.

Develop individualized bowel training programs for patients with altered bowel continence.

Understand the basic operations to manage macros in Access, including expanding, collapsing, and deleting actions.

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Definitions:

Supply and Demand

Fundamental economic concepts describing the relationship between the availability of a product or service (supply) and the desire of buyers for it (demand), which determines the market price.

Fiat Currency

A currency that the government has declared to be legal tender but is not backed by any physical commodity.

Legal Tender

Legal tender is currency that must be accepted if offered in payment of a debt; typically issued and regulated by a government.

Physical Commodity

Tangible goods that are traded, often used as inputs in the production of other goods or services, such as oil, gold, or wheat.