a) Machinery output refers as one of the primary concerns of production efficiency. The company...

60.1K

Verified Solution

Question

Accounting

a) Machinery output refers as one of the primary concerns of production efficiency. The company finds that in such situation with current capital expenditure the maximum amount of allocation for equipment exchange is possible by 40% equipment exchange and rest by modification. It's found that by exchange the overall efficiency increment happens in sales by 13.5% and by modification it happens by 3.75%. The associated increase in EBIT is accompanied by changes in Net Income. The increase in NI will be adjusted by increase in Cash/Cash equivalents and similarly by the increase in common stock. The increase in FA is accompanied by ST Loans Payable, LT Debts payable and by Notes and Bonds payable for 95% increase in FA. Note that the increase in exchange will be by 11% and by modification will be 2.5%.
\table[[Income Statement,455000],[Sales,65000],[COGS,16500],[Depr,373500],[Operating Income/GP,46000],[Operating Expense,327500],[EBIT,83000],[Interest Expense,244500],[EBT,31500],[Taxes,213000],[EAT,125000],[Retained Earnings,88000],[Net Income,]]
A. Suggest the CFFA
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students