Financial Management

 

Our company, Dawgs “R” Us, is evaluating a new project involving the purchase of a new oven to bake your hotdog buns. If purchased, the new oven will replace your existing oven, which was purchased seven years ago for a total installed price of $1 million.

You have been depreciating the old oven on a straight-line basis over its expected life of 15 years to an ending book value of $250,000, even though you expect it to be worthless at the end of that 15-year period. The new oven will cost $2 million and will fall into the MACRS 5-year depreciation class life. If you purchase the new oven, you expect it to last for eight years. At the end of those eight years, you expect to be able to sell it for $100,000. (Note that both of the ovens, old and new, therefore have an effective remaining life of eight years at the time of your analysis.) If you do purchase the new oven, you estimate that you can sell the old one for its current book value at the same time.

The advantages of the new oven are twofold: Not only do you expect it to reduce the before-tax costs on your current baking operations by $75,000 per year, but you will also be able to produce new types of buns. The sales of the new buns are expected to bring your company $200,000 per year throughout the eight-year life of the new oven, while associated costs of the new buns are only expected to be $80,000 per year.

Since the new oven will allow you to sell these new products, you anticipate that NWC will have to increase immediately by $20,000 upon purchase of the new oven. It will then remain at that increased level throughout the life of the new oven to sustain the new, higher level of operations.

 

Sample Solution

separated by a title name: Employment, Affordability, Age, Learning Advances, Employer Perceptions and Burning Out. Underneath said concerns, descriptions are stated involving information that may not be known by future learners. However, in addition, Sabell also notes information that gives awareness of how to address and overcome said concerns. ‘I’m too old to study’ shows ones age as a negative barrier. Whereas, ‘age is their greatest advantage,’ attains a positive quality and illustrates their experiences of the world and their knowledge gained from the importance of learning. This piece of research is dated from 2017 and is considered relevant and fairly up to date. Also, the source reference of this article is from The College for Adult Learning, reassuringly confidence is given in that the knowledge and information published is creditable, as it’s from an educational setting.

According to Caschera (2013), the three biggest challenges facing adult learners are balancing school and life, accessibility and costs. The realisation of how time management is essential when deciding to enter or re-enter education is evident in all aspects of living. ‘The Balancing Act’ is detrimental to the success of progression, but many adult learners have family and work obligations. Furthermore, these ‘additional responsibilities can lead to stress and frustration for adult learners.’ It is then considered that accessibility is linked to time commitments and therefore attendance to classes may become more difficult during the regular course timetable, as employment and childcare may cause conflict. In turn, reluctance in the pursuit of higher education may occur. The long-term cost of higher education can also have a major impact on adult learners living situations.
However, knowledge of these concerns is being addressed by many educational institutes, resulting in more flexible options being made.
Moreover, positive information is given first and then the concerns are then

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