# Suppose you operate a coal power plant and is considering upgrading the flue gas desulphurisation (FGD) facility (or "scrubbers") to reduce sulphur dioxide emissions. A contractor says their new system will cost \$5000 per year to operate. Calculate, to the nearest dollar, the present value of the operational costs for the next four years. Assume a discount rate of 2%.

## Answers

Answer 1
Answer:

Answer:

The present value is  \$19,039

Explanation:

The computation of the Present value is shown below

= Present value of all yearly cash inflows after applying discount factor

The discount factor should be computed by

= 1 ÷ (1 + rate) ^ years

where,

rate is 2%

Year = 0,1,2,3,4 and so on

Discount Factor:

For Year 1 = 1 ÷ 1.02^1 = 0.9804

For Year 2 = 1 ÷ 1.02^2 = 0.9612

For Year 3 = 1 ÷ 1.02^3 = 0.9423

For Year 4 = 1 ÷ 1.02^4 = 0.9238

So, the calculation of a Present value of all yearly cash inflows are shown below

= (Year 1 cash inflow × Present Factor of Year 1) + (Year 2 cash inflow × Present Factor of Year 2) + (Year 3 cash inflow × Present Factor of Year 3) + (Year 4 cash inflow × Present Factor of Year 4)

= (\$5,000 × 0.9804) + (\$5,000 × 0.9612) + (\$5,000 × 0.9423) + (\$5,000 × 0.9238)

= \$4,901.96  + \$4,805.84  + \$4,711.61  + \$4,619.23

=  \$19,039

We take the first four digits of the discount factor.

## Related Questions

Toledo Tire Company, which has been in business for several years, produces and sells automobile tires, including their all-terrain RP7 tire. The 2018 sales budget for their all-terrain RP7 tire is as follows: Quarter RP7 tires 1 10,000 2 12,000 3 11,000 4 14,000 Per company policy: - management desires an ending inventory of tires each quarter equal to 20% of the next quarter's sales; - sales units of tires in the first quarter of 2019 are expected to be 25% higher than sales for the first quarter of 2018; - beginning inventory of tires on January 1, 2018 is anticipated to be 3,000 units.

### Answers

Complete Question:

a) Calculate the anticipated production for the first quarter of 2018 for the RP7 tire

b) Calculate the anticipated beginning inventory of the RP7 model tires for the third quarter of 2018

c) Calculate the anticipated production for the fourth quarter of for the RP7 tire

Answer:

a) Anticipated Production for the first quarter of 2018 for the RP7 tire = 9,400

b) Anticipated beginning inventory of the RP7 model tire for the third quarter of 2018 = 2,200

c) Anticipated production for the fourth quarter of 2018 for the RP7 tire = 13,700

Explanation:

The explanation is summarized by the table attached to this solution.

On January 1, 2016, Jacob Inc. purchased a commercial truck for \$48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of \$8,000. On December 31, 2017, Jacob Inc. sold the truck for \$43,000. What amount of gain or loss should Jacob Inc. record on December 31, 2017? A. Gain, \$22,000.
B. Gain, \$5,000.
C. Loss, \$3,000.
D. Loss, \$18,000.

### Answers

Answer:

The correct answer is B: gain \$5000

Explanation:

Giving the following information:

On January 1, 2016, = commercial truck for \$48,000.

straight-line depreciation method.

useful life of eight years.

residual value of \$8,000.

On December 31, 2017, Jacob Inc. sold the truck for \$43,000.

Depreciation expense per year= (Purchase value - residual value)/8

Depreciation expense per year= (48000-8000)/8=5000

Accumulated depreciation year 2= 5000*2= 10000

To calculate the gain or loss we need to use the following formula:

Gain/loss= price value - book value

Gain/loss= price value - (purchase price - accumulated depreciation)

Gain/loss= 43000 - (48000- 10000)= 5000 gain

Which of the following could be considered a cost driver? Select one: a. A service provided by an architecture firm b. A product produced by a manufacturer c. A tax return prepared by a local CPA firm d. All of the above

### Answers

Answer: d. All of the above

Explanation:

A cost driver refers to the activity that causes an actual change in the cost of a transaction and by extension it's local cost.

For example, cost driver of labor would be the number of people working or cost driver of Electricity paid would be the actual number of units consumed.

In the above, the products and services mentioned are the integral activities for those firms so they are cost drivers to those firms.

You are about to purchase a new car from a dealer who has a new and unusual payment plan. You have the choice to pay \$29,000 cash today or \$32,000 in 4 years. If you have the opportunity to borrow the cash price value of the car at a rate of 3.0% and repay the loan in a lump sum in 4 years, which option should you take and why? HTML Editor Keyboard Shortcuts

### Answers

Answer:

It would be bettter to make an agreement with the car dealer for the 32,000 in 4 years.

Explanation:

We will y comparing the value of the loan in 4 years;¿ with the 32,000 in for years option:

Principal \$    29,000.00

time             4 years

rate                     3% = 3/100 = 0.030

Amount \$   32,639.76

Which is higher than the 32,000 option. Therefore, the loan option is more expensive than the financing through the car dealer.

It is a better option to make deal with the car seller.

​Joe's Bottling Company provided the following expense information for​ July: Assemblyline ​workers' wages Depreciation on factory equipment Caps for bottles Plastic bottles Reconfiguring the assembly line Salaries of salespeople Customer support hotline Salaries of research scientists Delivery expenses Customer tollfree order line What is the total cost for the distribution category of the value​ chain?

### Answers

Answer:

\$40,000

Explanation:

Based on the information given we were told that the Delivery expenses is the amount of \$ 40,000 which means that DELIVERY EXPENSES amount of \$40,000 will be the TOTAL COST for the distribution category of the value​ chain forJoe's Bottling Company reason been that the \$40,000 is the amount that was used by the company to deliver their product from the production department to the final user of the product.

Therefore the total cost for the distribution category of the value​ chain will be \$40,000

### Final answer:

The total distribution cost for Joe's Bottling Company includes the costs of salaries for salespeople, delivery expenses and customer toll-free order line. Add these three to calculate the total distribution cost. Other costs listed are associated with other stages of the value chain.

### Explanation:

In the context of cost accounting in a business, the value chain concept divides a company's activities into various categories. For Joe's Bottling Company, the total cost for the distribution category, also known as outbound logistics, only includes the expenses that are directly related to getting the product from the company to the customer.

Looking at the information provided, the expenses relevant to distribution are Salaries of salespeople, Delivery expenses, and Customer toll-free order line. These are costs associated with the activities that allow customers to purchase the product and the company to deliver it.

To calculate the total distribution cost, you would have to add up the cost of these three items. Remember that costs can vary, so it's crucial to use the correct figures for each expense. Other costs, such as assembly line wages or depreciation on factory equipment, do not fall under distribution costs because they are involved in other stages of the value chain, such as production or operations.

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Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 86,000 units, 70% complete as to materials and 25% complete as to conversion. Units started and completed: 262,000. Units completed and transferred out: 348,000. Ending Inventory: 33,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: \$37,200. Costs in beginning Work in Process - Conversion: \$79,700. Costs incurred in October - Direct Materials: \$646,800. Costs incurred in October - Conversion: \$919,300. Calculate the equivalent units of conversion.

### Answers

Answer:

The equivalent units of conversion is 351,300

Explanation:

The computation of the conversion equivalent units is shown below:

= (Units completed and transferred out × conversion percentage) +  (Ending Inventory × conversion percentage)

= 348,000 × 100% + \$33,000 × 10%

= 348,000 + 3,300

= 351,300

All other information which is given in the question are not relevant. So, ignore other information.