Aarons Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply).
Aarons estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through five respectively. A new steam press operator will need to be hired at $13.00 per hour and will work 40 hours per month for the year. That employee will get a raise of $0.25 per year every year starting in the second year. Shirts currently cost customers $3 for dry cleaning; and an additional charge of $1.35 will be added for pressing. Lily will also need to add a $1,500 annual insurance policy to cover any steam-related accidents.
Assume Aarons pays 17% in tax on its taxable income and is looking at a five-year return period over which she would expect to earn a 10% rate of return.
What is the the amount of Revenues in year 1 (rounded to the nearest dollar)?
A) $24,510
B) $12,150
C) $1,500
D) None of the above
B: $12150
revenues in year 1 = Demand in year 1* Pressing charges
= 9000 units*1.35
= $12,150
Aarons Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services t...
Lily’s Loving Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply). Lily estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through...
Lily’s Loving Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply). Lily estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through...
Lily’s Loving Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply). Lily estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through...
Lily’s Loving Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply). Lily estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through...
Lilys' Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply). Lily estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through five...
Lily’s Loving Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply). Lily estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through...
Lily’s Loving Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply). Lily estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through...
Lily’s Loving Laundry is thinking about installing a new steam press at its facility so it can add in-house pressing services to its product offerings. The new press steamer will cost $14,400. It will last for five years, be depreciated on a straight-line basis to a salvage value of $4000 but will be resold for $1,400 after five years (assume no taxes apply). Lily estimates its demand to press shirts as: 9000, 9000, 9000, 9200, 9200 in years one through...