# The delivered equipment cost for setting up a production and assembly line for two-way floating ball valves is \$650,000. If the direct cost and indirect cost factors are 1.82 and 0.31, respectively, and only the direct cost factor applies to delivered equipment cost, the total plant cost estimate is approximately:a. \$ 2,034,500b. \$ 2,401,230c. \$ 2,684,500d. \$ 2,983,000

\$2,034,500 ; A

Explanation:

In this question, we are asked to calculate cost estimate.

One of the methods which we can use to do this is the cost factor technique.

Mathematically, the estimated total cost will be;

Ct = hCe

Where Ce refers to cost at major equipment and h is the overall cost factor.

From the question, we can identify the following;

Ce is \$650,000 while h = 1.82 + 1 + 0.31 = 3.13

Inputing these values in the formula, we have;

Ct = \$650,000 * 3.13 = \$2,034,500

a) 2, 034,500

Explanation:

the explanation is given in the file attached

## Related Questions

When other things remain equal, buyers are expected to stock up from the normal product that they expect its market price to decline significantly in the soon future.a) true
b) false

Explanation:

They would not want to stock up on something that the market price will decline significantly on, they would do the opposite

False

Explanation:

This is false, they would want to do the opposite, not stock up

1. In a Year 20,367 20,017

2. In a Year 21,333 21,917

3. In the case of NPW analysis Selected Target is best option because it is the better and cheaper investment while EUAM analysis states Walmart kit is better option,

4.Target is the best option because the cost difference is only around \$600 which will last for 6 Years while in walmart case we will need to replace all the furniture in 3 Years .

Explanation:

1. Using NPW Analysis

Walmart Kit Target

Intial Cost 40000 65000

AMC 10000 12000

Salvage Value 12000 25000

Life Years 3 6

Total Cost

Intial Cost 40000 65000

Less Salvage 12000 25000

Balance 28000 40000

5% Interest 6000 19500

AMC PV 2.71 5.05

Amc 27100 60600

Total Cost 61100 120100

In a Year 20,367 20,017

2. Using EUAW Analysis

Walmart Kit

Target

Intial Cost 40000 65000

AMC 10000 12000

Salvage Value 12000 25000

Life Years 3 6

Total Cost

Intial Cost 40000 65000

Less Salvage 12000 25000

Balance 28000 40000

5% Interest 6000 19500

AMC 30000 72000

Total 64000 131500

In a Year 21,333 21,917

In the case of NPW analysis Selected Target is best option because it is the better and cheaper investment while EUAM analysis states Walmart kit is better option,

Target is the best option because the cost difference is only around \$600 which will last for 6 Years while in walmart case we will need to replace all the furniture in 3 Years .

Hence Target product will be the best option we would advice the management to go for.

To determine which kitchen kit to choose, you can use NPW (Net Present Worth) analysis and EUAW (Equivalent Uniform Annual Worth) analysis. In NPW analysis, calculate the present worth of each option by subtracting the present value of the annual maintenance cost from the sum of the present value of the salvage value and the present value of the first cost. In EUAW analysis, divide the NPW by the present worth factor to calculate the equivalent uniform annual worth. You can extend the analysis to show the EUAW for an extended life of the products. Present the information ethically and transparently, addressing your bias towards the Target kit and presenting the analysis results objectively.

### Explanation:

a. In order to determine which kitchen kit to choose using NPW analysis, we need to calculate the present worth of each option. The present worth is calculated by subtracting the present value of the annual maintenance cost from the sum of the present value of the salvage value and the present value of the first cost. You can use the formula: NPW = (-FC + PV(SV) + PV(AMC)) / (1 + i)^n, where FC is the first cost, PV(SV) is the present value of the salvage value, PV(AMC) is the present value of the annual maintenance cost, i is the interest rate, and n is the number of years.

b. To determine which kitchen kit to choose using EUAW analysis, we need to calculate the equivalent uniform annual worth of each option. The EUAW is calculated by dividing the NPW by the present worth factor. You can use the formula: EUAW = NPW / Present Worth Factor, where NPW is the net present worth, and the Present Worth Factor is calculated using the formula: Present Worth Factor = (1 - (1 + i)^-n) / i.

c. To show that the Target option is the better choice, you can extend the analysis from part b and calculate the EUAW for an extended life of the products. Simply substitute the new number of years into the formula and compare the EUAWs of the two options.

d. Since you have a bias towards the Target kit, it is important to present the information ethically and transparently. You can start by explaining your bias and personal preference, and then present the analysis results objectively, showcasing the financial aspects and consequences of each option. It is crucial to provide all the necessary information and allow management to make an informed decision based on the facts presented.

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Suppose the economy only produces three goods: bread, laptops, and movies. Calculate the CPI of 2008, using 2004 as the base year.

Most of the question is missing, so I looked for a similar one and found the attached image.

CPI = (current year price × base year quantity) / (base year price × Base year quantity)

CPI for bread in current year = [(\$1.50 × 2,000) / (\$1 × 2,000)] x 100 = 150

CPI for laptops in current year = [(\$1,500 × 100) / (\$2,000 × 100)] x 100 = 75

CPI for movies in current year = [(\$7 × 50) / (\$5 × 50)] x 100 = 140

CPI for current year = (CPI for bread x weight of bread) + (CPI of laptops x weight of laptops) + (CPI of movies x weight of movies) = (150 x \$2,250/\$227,530) + (75 x\$225,000/\$227,530) + (140 x \$280/\$227,530) = 1.48 + 74.17 + 0.17 =75.82

To calculate the CPI in 2008 using 2004 as the base year, compare the prices of the three goods (bread, laptops, and movies) in 2008 to their prices in 2004. Multiply the price of each good by the quantity consumed to calculate the cost of the basket in each year. Divide the cost of the basket in 2008 by the cost of the basket in 2004 and multiply by 100 to get the CPI.

### Explanation:

The CPI (Consumer Price Index) measures the change in the prices of a fixed basket of goods and services over time. To calculate the CPI in 2008 using 2004 as the base year, you need to compare the prices of the three goods (bread, laptops, and movies) in 2008 to their prices in 2004. Here's how you can calculate the CPI:

1. Determine the price of each good in 2008 and 2004.
2. Calculate the cost of the basket in 2008 by multiplying the price of each good by the quantity consumed.
3. Calculate the cost of the basket in 2004 by multiplying the price of each good by the quantity consumed.
4. Divide the cost of the basket in 2008 by the cost of the basket in 2004 and multiply by 100 to get the CPI.

For example, if the cost of the basket in 2008 is \$100 and the cost of the basket in 2004 is \$80, the CPI would be (100/80) * 100 = 125.

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In January, 2006, Findley Corporation purchased a patent for a new consumer product for \$720,000. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. During 2011 the product was permanently removed from the market under governmental order because of a potential health hazard present in the product. What amount should Findley charge to expense during 2011, assuming amortization is recorded at the end of each year?a. \$480,000.
b. \$360,000.
c. \$72,000.
d. \$48,000.

b. \$360,000.

Explanation:

Data provided in the question

Purchase value of the patent = \$720,000

At the time of purchase, the patent life is 15 years

And, the useful life of the patent is 10 years

So, the amortization expense recorded value is

= \$720,000 ÷ 10 years × 5 years

= \$360,000

The five years is counted from the year 2006 to the year 2011

Case Description Tablets have become an ubiquitos part of our lives. The first models were launched in US in the year 2010.
Sales data is available for the first seven years (See below). As part of your analysis on the outlook for this industry:
a) How would you characterize the future for tablets? Are consumers crazy about this technology or are luke warm?
b) Prepare a five year forecast for this industry; has the market reached its peak (please identify the demand peak).

Please use the Bass Model Estimator provided. Use the spreadsheet tab called "Analysis Report"
Please clearly provide market size assumptions and justifications.
Year Annual Sales (Units Sold)
2010 3,000,000
2011 10,000,000
2012 25,000,000
2013 34,000,000
2014 39,000,000
2015 45,000,000
2016 51,000,000

a) According to the published sales statistics, it appears that the initial release of tablets in 2010 was warmly accepted by customers, since sales increased quickly in the years that followed. With only a 13% rise in revenue from 2015 to 2016, the rate of growth has slowed recently. This shows that customer enthusiasm for the technology may be waning.

b) We will utilize the Bass Model Estimator available on the "Analysis Report" page to project sales over the following five years. The "coefficient of innovation" (p) of this model accounts for the number of customers who have embraced the technology as well as the number of potential consumers who have not yet adopted the technology but may be persuaded to do so.

Explanation:

A category of assets that typically has zero in the Free Assets column in a Statement of Affairs is: