X Company has an opportunity to accept a special order that will result in immediate profit...
X Company has an opportunity to accept a special order that will
result in immediate profit of $75,000. After doing some market
research that cost $5,000, the marketing manager believes that if X
Company accepts the order, the company will lose regular customers.
Specifically, she believes the effect will be lost profits of
$8,000 in each of the next 4 years.
Assuming a discount rate of 8%, what is the net present value of
accepting the special order? [Note: Use the Present Value tables in
the Coursepack.]
Homework Answers
Answer- The present value of accepting the special order= $48504.
Explanation- Net present value = Present value of cash inflows – Total outflows
= $75000- ($8000*3.312)
= $75000-$26496
= $48504
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X Company has an opportunity to accept a special order that will
result in immediate profit...
X Company has an opportunity to accept a special order that will result in immediate profit...
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1. What is the expected level of profit? 2. Should the company accept a special order...
1. What is the expected level of profit?
2. Should the company accept a special order for 1,000 units at a
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incremental profit if the order is accepted?
3. Suppose that the company received a special order for 3,000
units at a selling price of ₹ 450, with no variable marketing
expenses. What would be the impact...
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Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special-order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine.Lost Mine has offered to buy 1,500 of the US umbrellas at a price of $11 each. Mohave currently has the excess capacity necessary...
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Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special-order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine. Lost Mine has offered to buy 3,100 of the US umbrellas at a price of $32 each. Mohave currently has the excess capacity necessary...
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Exercise 11-22 Special Order; Opportunity Cost [LO 11-2) Grant Industries, a manufacturer of electronic parts, has...
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Complete this problem E8-22A Special order decision and considerations (Learning Objective 3) Jasper McKnight Sunglasses sell...
Complete this problem
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please use the information and answer the 2 requirements. E8-22A Special order decision and considerations (Learning...
please use the information and answer the 2
requirements.
E8-22A Special order decision and considerations (Learning Objective 3) Jasper McKnight Sunglasses sell for about $150 per pair. Suppose the company incurs the following average costs per pair: Direct materials ..... $40 Direct labor ..................................................... Variable manufacturing overhead.......... Variable marketing expenses ..................... Fixed manufacturing overhead .................... Total costs........................ *$2,100,000 total fixed manufacturing overhead/84,000 pairs of sunglasses 12 25 $88 Jasper Mcknight has enough idle capacity to accept a one-time-only special order...
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1. What is the expected level of profit?
2. Should the company accept a special order for 1,000 units at a
selling price of ₹ 1,000 if variable marketing expenses associated
with the special order are ₹ 100 per unit? What will be the
incremental profit if the order is accepted?
3. Suppose that the company received a special order for 3,000
units at a selling price of ₹ 450, with no variable marketing
expenses. What would be the impact...
-2] 11-22 Special Order: O Order: Opportunity Cost Grant Industries, a manufacturer of electronic parts, has e received an invitation to bid on a special order for 20,000 units of one of its most popular ducts. Grant currently manufactures 40,000 units of this product in its Loveland, Ohio, plant. The plant is operating at 30% capacity. There will be no marketing costs on the special order The sales manager of Grant wants to set the bid at $9 per unit...
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Complete this problem
E8-22A Special order decision and considerations (Learning Objective 3) Jasper McKnight Sunglasses sell for about $150 per pair. Suppose the company incurs the following average costs per pair: $40 12 Direct materials ...... Direct labor Variable manufacturing overhead.... Variable marketing expenses. Fixed manufacturing overhead .......... Total costs...... *$2,100,000 total fixed manufacturing overhead/84,000 pairs of sunglasses $88 Jasper McKnight has enough idle capacity to accept a one-time-only special order from Arizona Glasses for 17,000 pairs of sunglasses at...
please use the information and answer the 2
requirements.
E8-22A Special order decision and considerations (Learning Objective 3) Jasper McKnight Sunglasses sell for about $150 per pair. Suppose the company incurs the following average costs per pair: Direct materials ..... $40 Direct labor ..................................................... Variable manufacturing overhead.......... Variable marketing expenses ..................... Fixed manufacturing overhead .................... Total costs........................ *$2,100,000 total fixed manufacturing overhead/84,000 pairs of sunglasses 12 25 $88 Jasper Mcknight has enough idle capacity to accept a one-time-only special order...
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