To open a clothing repair shop, you need to carry out the following expenses: purchase of raw materials and materials - 50 thousand UAH. per year, the cost of equipment - 200 thousand UAH. (service life - 10 years), rental of premises - 3 thousand UAH. monthly, salary of employees - UAH 8.4 thousand. monthly, electricity - 18 thousand UAH. in year. For the amount of funds invested in production, it would be possible to receive an income of 7% per annum, as well as receive wages in a similar production - 30 thousand UAH. in year. Calculate accounting, economic and normal profit if the total income of the enterprise is 550 thousand UAH. in year

To open a clothing repair shop, you need to carry out the following expenses: purchase of raw materials and materials - 50 thousand UAH. per year, the cost of equipment - 200 thousand UAH. (service life - 10 years), rental of premises - 3 thousand UAH. monthly, salary of employees - UAH 8.4 thousand. monthly, electricity - 18 thousand UAH. in year. For the amount of funds invested in production, it would be possible to receive an income of 7% per annum, as well as receive wages in a similar production - 30 thousand UAH. in year. Calculate accounting, economic and normal profit if the total income of the enterprise is 550 thousand UAH. in year

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3EB: A restaurant is considering the purchase of new tables and chairs for their dining room with an...

See similar textbooks

Similar questions

The company's revenue is 100 000 rubles. The cost of materials, raw materials is 35 000 rubles, the cost of fuel and energy consumption is 10 000 rubles. The wages of employees are 25 000 rubles. Having a specialist diploma, an entrepreneur could receive a wage as an employee in another company in the amount of 5000 rubles, while he could put the available money (200 000) into the bank at an annual interest rate of 10%. Calculate the accounting and economic profit of this firm: Solution: ____________________________________ ____________________________________________ ____________________________________________ _____________________________________________ ANSWER: ________________
The company's revenue is 100 000 rubles. The cost of materials, raw materials is 35 000 rubles, the cost of fuel and energy consumption is 10 000 rubles. The wages of employees are 25 000 rubles. Having a specialist diploma, an entrepreneur could receive a wage as an employee in another company in the amount of 5000 rubles, while he could put the available money (200 000) into the bank at an annual interest rate of 10%. Calculate the accounting and economic profit of this firm.
A library shelving system has a first cost of $24,500 and a useful life of 7 years. The annual maintenance is expected to be $2,900. The annual benefits to the library staff are expected to be $9,400. If the effective annual interest rate is 11.5%, what is the benefit-cost ratio of the shelving system?
Our start-up costs include the cost of leasing and renovating the store, purchasing inventory, and salary. We estimate our start-up costs to be $200,000. Amount of the loan 100,000 Personal savings 100,000 Our ongoing operating costs include rent, utilities, payroll, inventory, and marketing expenses. We estimate our monthly operating costs to be $30,000 We plan to finance our start-up costs through a combination of personal savings, loans from a financial institution Revenue 20,000 We estimate our break-even point to be approximately $50,000 in monthly revenue. This means that we will need to generate at least $50,000 in sales each month to cover our operating costs and break even. From the above information Prepare a Balance sheet, income statement, and financial statements Prepare Pro Forma (Projected) Financial Statements for Three to Five Years If anything is wrong in this please solve which ever way is correct and explain
The Rizal Park is maintained by 17 guards, who patrols the around 24 hours rotationally and 38 streetsweepers. If the streetsweepers have an average wage of Php 250,000 per year with benefits and the guards get Php 200,000. What is the capitalized cost today of all the future wages for park maintenance at an interest rate of 8% per year?
A bag manufacturer will rent a space in a mall for 24 months for an exhibit. The monthly rent is p25,000 and is paid at the beginning of each month. The manufacturer likes to pay a single lump sum at the beginning of the two-year period. He wants to have that lump sum when the exhibit begins, so he needs to invest this amount at 7.5% per annum. How much is that lump sum?
A major credit card company is launching a referral program, which gives an existing customer $50 for each new customer he or she refers to the company. The credit card company estimates that the average annual spending of a customer is $15,000, and the revenue for the credit card company would be 5% of the spending. The estimated marketing and operations costs for the referral program is $500,000 per year. a. Build a spreadsheet model for the credit card company to estimate the annual increase in profit gained from the referral program. If the referral program helps the credit card company acquire 25,000 new customers, what is the annual increase in profit gained from the referral program. Assume all new customers are acquired at the beginning of the year. Profit increase b. It is estimated that 10% of the customers acquired through the referral program would have become customers of the credit card company even without the referral program. How does this information change the…
A food company intends to purchase a piece of equipment worth R$ 50,000. How much should she invest today, in an investment that earns 1% per month, to have the amount needed in a year?
A production company is planning to open up another manufacturing setup in order to cope up with rising demand. The cost engineer documents all equipment needed for this new setup and made a loan from a bank that they pay 5000 per month for the next 5 years at 6% compounded monthly. How much is the future worth of the loan?
The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be $50,000, and rental costs for the shop are $30,000 a year. Depreciation on the repair tools will be $10,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. b. Calculate the operating cash flow for the repair shop using the three methods given below: Dollars in minus dollars out. Adjusted accounting profits. Add back depreciation tax shield.
A company is going to buy a new machine for manufacturing its products. Three machines are available. Data is as follows: Money is worth 17% before taxes to the company. Which machine should be chosen?Use Present Worth Method
The building management is planning to replace the central heating system with a modern plant, costing $1M (all expenses included). To secure the required grant, all 250 tenants are asked to pay additional monthly fees; the management is planning to invest the additional money in a credit union, paying 26% interest, compounded every three months. How much extra should each tenant pay per month so that the new system can be bought within 2.5 year?