Johnson's Mini Mart Is Considering the Purchase of a New

question 69

Essay

Johnson's Mini Mart is considering the purchase of a new electronic bar code scanner that will keep detailed records of every sale transaction. The scanner is likely to have little effect on operating revenues and expenses. Its acquisition is primarily for increasing management information about sales. The scanner costs $4,600 and would be included in Class 10 for tax purposes. Johnson's accountant has stated that due to the fast write-off of Class 10 assets (30% CCA rate), its real cost is less than $4,600.
Due to technological obsolescence, it would have zero salvage value.
Required:
a. Since the bar code scanner cannot produce a profit or even show short run savings, should it even be evaluated as a capital budgeting expenditure? Explain.
b. Explain whether or not the real cost is less than $4,600.
c. If the company has a 40 percent tax rate and a 10% discount rate, compute the real cost of the bar code scanner. Assume there would be other assets in the class.

Understand the necessity and appropriate timing for third-party intervention in conflict resolution.

Recognize the different forms and impacts of indirect pressure in mediation.

Identify the conditions under which third-party interventions may be ineffective or counterproductive.

Comprehend the procedural nature and common forms of third-party interventions.

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Definitions:

New Product Features

Innovations or additions to a product that enhance its value, usability, or appeal to consumers.

Product Life Cycle

Describes the stages a product goes through from its inception to its decline, typically including introduction, growth, maturity, and decline phases.

Sony TV

A brand of television produced by Sony Corporation, known for its high quality, innovation, and advanced technology.

4K Resolution

A high-definition video resolution that consists of approximately 4,000 horizontal pixels, offering detailed and sharp imagery.