Windhoek Mines, Limited, of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows woul be associated with opening and operating a mine in the area: Cost of new equipment and timbers Working capital required Annual net cash receipts Cost to construct new roads in three years Salvage value of equipment in four years $ 440,000 $ 150,000 $ 165,000* $ 50,000 $ 75,000 *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 18%.
Q: Sunland Company is contemplating the replacement of an old machine with a new one. The following…
A: Relevant cost is the cost that is different between different alternatives. This cost is considered…
Q: Tim and Allison are married and have two children, ages 8 and 13. Allison is a "nonworking" spouse…
A: The first thing you need to consider while purchasing a life insurance is the amount of coverage…
Q: Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is…
A: Lower of cost or market is an approach to valuation of inventory. The concept of lower of cost and…
Q: A refinery buys 20 million barrels of crude oil at a market price of $25 per barrel on 17th August…
A: The objective of the question is to determine the correct statements about current replacement cost…
Q: A partnership begins its first year of operations with the following capital balances: Allegan,…
A: The partnership comes into existence when two or more people agree to do business and share profits…
Q: SkyChefs, Incorporated, prepares in-flight meals for a number of major airlines. One of the…
A: Direct labor variance is the difference between standard direct labor cost for actual production and…
Q: Which of the following is a possible cause of an unfavourable materials quantity variance? • Use of…
A: The unfavourable materials quantity variance is the variance in which the quantity which has been…
Q: Vaughn Company reported the following balances at June 30, 2022:Sales RevenueSales Returns and…
A: Net Sales: Net sales, also referred to as revenue or turnover, represent the total amount of money…
Q: Tyler Enterprises makes an assortment of computer support equipment. Dana Josephs, the new…
A: Accounting for Merchandise Inventory Merchandise Inventory refers to the value of goods in stock,…
Q: When using the perpetual system for inventory, the journal entry to record a purchase of inventory…
A: The objective of the question is to identify the correct journal entry to record a purchase of…
Q: Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials:…
A: a. Material price variance: The difference in cost due to paying a higher price for materials than…
Q: Mercado Ltd started its business with £21,000 in cash on 1 Jan 20X1, and immediately purchased 400…
A: The objective of the question is to calculate the cash balance at the end of the year under current…
Q: Sheridan Ltd. initiated a one-person pension plan in January 2015 that promises the employee a…
A: 1. Years of Service: - Start year: 2015 - End year (expected retirement): 2041 - Years of…
Q: 5
A: Direct Materials3,000Conversion Costs2,250Cost of ending work in process5,250 Direct…
Q: ! Required information [The following information applies to the questions displayed below] Diego…
A: Contribution margin is defined as the portion of revenue left with an entity after it has disbursed…
Q: Arcus Development Inc.'s equity section on the December 31, 2019, balance sheet showed the following…
A: The objective of the question is to prepare the journal entries for the declaration and distribution…
Q: What is the primary purpose of the balance sheet? A) To show the company's revenue and expenses over…
A: A Balance Sheet is a financial statement that provides a shot of a company's financial position at…
Q: The accounting records of Wall's China Shop reflected the following balances as of January 1, Year…
A: First-in First-Out Method - Under the First-in First-Out Method company uses inventory in the…
Q: A company's year-end selected financial data is shown below. Year 2 Year 1 Current assets $250,000…
A: The company's rate of return on assets for Year 2 is 12.5%, which is closest to 13% in the given…
Q: Boxit Ltd. sells box juices and had the fo lowing transactions for the month of December. Stock on…
A: The objective of the question is to calculate the closing stock of Boxit Ltd. using three different…
Q: Wolverine World Wide, Incorporated, designs, markets, and licenses casual, industrial, performance…
A: The accounting equation states that assets are equal to the sum of the liabilities and equity. The…
Q: Bonds Payable has a balance of $802,000 and Discount on Bonds Payable has a balance of $9,624. If…
A: The objective of this question is to calculate the gain or loss on redemption of bonds. The company…
Q: Brock Company makes candy. During the most recent accounting period Brock paid $7,000 for raw…
A: Total manufacturing costs is the total cost incurred in the manufacturing of product during the…
Q: Problem 10-3A (Algo) Indicate effect of stock dividends and stock splits (LO10-6) Bob's Golf…
A: Answer:- A stock split is a business decision or action. In that decision, a company divides its…
Q: Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan…
A: Tax is the amount that is charged by the government to individuals and businesses on the income…
Q: Regarding a basic capital (finance) lease for a lessee, which of the following statements is…
A: Lease liability is a term used in accounting to describe the financial obligation a company has…
Q: Beached is a retail outlet situated in a very popular tourist town not far from Canberra. It is very…
A: The objective of the question is to prepare a cash receipts budget, a cash payments budget, and a…
Q: ! Required information [The following information applies to the questions displayed be Performance…
A: ACTIVITY BASED COSTINGActivity Based Costing is a Powerful tool for measuring…
Q: Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but…
A: It is the stock held for sale to customers. The inventory comprises of raw materials, work in…
Q: Sunland Productions uses flexible budgets. Amounts from the budget for March in which 3,170 units…
A: Variable costs are expenses that fluctuate based on the level of production or sales, such as raw…
Q: Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During…
A: The record of day-to-day transactions in the books of accounts is called journal entries. In a…
Q: Current Attempt in Progress You are considering investing in the grocery sector and have identified…
A: To calculate and compare the return on assets (ROA) for Company Crane and Company Cullumber, we will…
Q: On April 1, Year 1, Exotic Motor Cars Incorporated declared a $120,000 cash dividend to be paid on…
A: Many people believe that firms may restore value to their shareholders by paying dividends.…
Q: White Co. purchased equipment on July 6, 20X7 for $96,000. The equipment has an estimated salvage…
A: The objective of the question is to calculate the book value of the equipment on December 31, 20X8…
Q: Function: IF, SUM; Formula: Multiply; Cell Referencing BE5.5 - Using Excel to Evaluate a…
A: Please refer below page.If you have any doubts please feel free to ask.Explanation:Step 1: Step 2:…
Q: am. 122.
A: The question is asking about the potential disadvantages of using departmental and plantwide…
Q: Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and…
A: Cash budget is an estimate of cash flows prepared by the business for a certain set time period.…
Q: Crane Construction's manufacturing costs for August when production was 1,240 units are as follows:…
A: Variable cost is the cost that changes with change in the activity of cost driver used. The variable…
Q: [The following information applies to the questions displayed below.] Assume that TDW Corporation…
A: Section 179- this section allows certain types of the businesses to deduct the cost of a certain…
Q: The Dairy Farm plc manages a flock of sheep. On 30 June 20X2, 100 sheep were born, all of which were…
A: To calculate the fair value gain recognized in respect of the 200 sheep according to IAS 41, we need…
Q: Required information [The following information applies to the questions displayed below.] Bunnell…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: Jordon and Heidi share income equally. For the current year, the partnership net income is $40,000.…
A: The objective of the question is to calculate the balance of Jordon's capital account at the end of…
Q: a. Prepare a materials variance information table showing the standard price, the actual price, the…
A: Generally, a variance refers to the difference between an expected, budgeted or planned value and an…
Q: i need the answer quickly
A: JOURNAL ENTRIESJournal Entry is the First stage of Accounting Process. Journal Entry is the Process…
Q: On February 3, Year 1, Teel Corporation enters into a subscription contract with several subscribers…
A: Teel Corporation Journal Entry - February 3, Year 1Transaction: Record the receipt of the down…
Q: Required Information [The following information applies to the questions displayed below]…
A: The perpetual inventory system is one of the inventory systems where the inventory is updated after…
Q: Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care…
A: The objective of the question is to determine the tax treatment of various expenses related to a…
Q: Current Attempt in Progress Culver Company is involved in producing and selling high-end golf…
A: TARGET COSTINGTarget Costing initiates cost management at the earliest stages of Product development…
Q: The Rolling Department of Jabari Steel Company had 2,300 tons in beginning work in process inventory…
A: Equivalent Production is represents the production of a process in terms of completed units.In other…
Q: Presented below are transactions related to Windsor, Inc. May 10 Purchased goods billed at $16,200…
A: Purchases accounts are the accounts used to purchase inventory for the trading purpose. Purchases…
Vikrambhai
Step by step
Solved in 3 steps with 2 images
- Windhoek Mines, Limited, of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. The company estimated the following cash flows related to opening and operating a mine in the area: Cost of new equipment and timbers Working capital required Annual net cash receipts Cost to construct new roads in three years Salvage value of equipment in four years *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 18%. Click here to view Exhibit 148-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: a. What is the net present value of the proposed mining project? b. Should the project be accepted? $ 400,000 $ 220,000 $ 155,000. $ 64,000 $ 89,000…Check my work Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area: Cost of new equipment and timbers Working capital required Annual net cash receipts Cost to construct new roads in year three Salvage value of equipment in four years $ 410,000 $ 135,000 S 150,000* $ 47,000 S 72,000 *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 18%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: a. What is the net present…Windhoek Mines, Limited, of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. The company estimated the following cash flows related to opening and operating a mine in the area: Cost of new equipment and timbers Working capital required. Annual net cash receipts Cost to construct new roads in three years Salvage value of equipment in four years *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 18%. Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using tables. Required: a. What is the net present value of the proposed mining project? b. Should the project be accepted? Complete this question by entering your answers in…
- Windhoek Mines, Limited, of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. The company estimated the following cash flows related to opening and operating a mine in the area: Cost of new equipment and timbers Working capital required Annual net cash receipts Cost to construct new roads in three years Salvage value of equipment in four years. $ 330,000 $ 200,000 $ 135,000* $ 60,000 $ 85,000 *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 18%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: a. What is the net present value of the proposed mining project? b. Should the project be accepted?The L-S Mining Company is planning to open a new strip mine in western Pennsylvania. The net investment required to open the mine is $9 million. Net cash flows are expected to be +$17 million at the end of year 1 and +$11 million at the end of year 2. At the end of year 3, L-S will have a net cash outflow of $21 million to cover the cost of closing the mine and reclaiming the land. Use Table II to answer the questions. Calculate the net present value of the strip mine if the cost of capital is 3, 9, 11, 77, 87, and 92 percent. Enter your answers in millions. For example, an answer of $1.20 million should be entered as 1.20, not 1,200,000. Round your answers to two decimal places. k NPV 3% $ million 9% $ million 11% $ million 77% $ million 87% $ million 92% $ million What is unique about this project? The NPV is negative at discount rates between % and %, positive from % to % and negative beyond %. Should the project be accepted if L-S's cost of…c. Sabuni Itd is considering expanding its operation by acquiring a new plant in Mombasa. The cost of the plant is 50 million. The new plant is expected to generate the following projected cash flows for a period of 5 years. Year 1 3 Cash 15,000,000 18,000,000 20,000,000 25,000,000 35,00,000 flows Required: Using NPV technique, advise the company on whether to acquire the plant if the discount rate is 10% LERO)
- What is the accounting rate of return for Project B? (Round your answer to two decimal places. Martin Production Co. is considering investing in specialized equipment costing $975,000. The equipment has a useful life of five years and a residual value of $75,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are given below: Year 1 $275,000 Year 2 220,000 Year 3 200,000 Year 4 200,000 Year 5 180,000 $1.075.000 Compute the accounting rate of return on the investment, Show your calculations.The Marigold Company is planning to purchase $577,000 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment. Year 1 2 3 456 7 Total Projected Cash Flows $214,000 169,500 124,500 Payback period 55,200 55,200 48,500 The company 48,500 (a) Calculate the payback period for the proposed equipment purchase. Assume that all cash flows occur evenly throughout the year. $715,400 years and (b) If Marigold requires a payback period of 4 years or less, should the company make this investment? months. make this investment.Net Present Value Analysis Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area: The mineral deposit would be exhausted after four years of mining. At that point, the working capital would he released for reinvestment elsewhere. The company’s required rate of return is 20%. Required: What is the net present value of the proposed mining project? Should the project be accepted? Explain.
- Bullock Gold Mining is evaluating a new gold mine in South Dakota. All of the analysis has been done and the CFO has forecast some of the relevant cash flow information. If BGM opens the mine, it will cost $635 million today (Time 0) and it will have a cash outflow nine years from today (Time 9) of $45 million in costs related to closing the mine and reclaiming the area around. Of the initial costs, BGM will depreciate $500 million over 8 years using straight line method. Expected earnings before taxes for the eight years of operation are shown below. BGM has a required rate of return for all of its gold mines of 12%. Earnings before taxes (in $1,000s): 0 1 2 3 4 5 6 7 8 9 37,857.14 60,714.29 96,428.57 157,857.1 203,571.4 132,142.9 117,857.1 85,000.00 Find the relevant cash flows for each of the relevant periods (Time 0 – Time 9). Calculate the NPV, IRR and Payback Period for the cash flows and indicate whether BGM should…he Novak Company is planning to purchase $502,100 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment. Year Projected Cash Flows 1 $193,500 2 141,500 3 94,500 4 79,200 5 79,200 6 45,000 7 45,000 Total $677,900 (a) Calculate the payback period for the proposed equipment purchase. Assume that all cash flows occur evenly throughout the year. Payback period years and months. (b) If Novak requires a payback period of three years or less, should the company make this investment? The company should notshould make this investment.Bailey Corporation is considering purchasing one of two new processing machines. Either machinewould make it possible for the company to produce its products more efficiently than it is currentlyequipped to do. Estimates regarding each machine are provided below:Machine A Machine BInitial Investment $113,250 $270,000Estimated life 10 years 10 yearsSalvage value -0- -0-Estimated annual cash inflows $30,000 60,000Estimated annual cash outflows $ 7,500 $15,000Instructions1. Calculate the net present value and profitability index of each machine. Assume an 8% discountrate. Which machine should be purchased?Bailey Corporation did some further research and found one other possible machine that would producethe same type of production efficiencies. The information regarding Machine C is below:Machine CInitial Investment $250,000Estimated life 10 yearsSalvage value $ 30,000Estimated annual cash inflows $ 45,000Estimated annual cash outflows $ 10,0002. Calculate the net present value and…