Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. delta manufacturing inc is considering purchasing

Delta Manufacturing Inc is considering purchasing a new machine to meet increasing demand. The relevant...

90.2K

Verified Solution

Question

Accounting

Delta Manufacturing Inc is considering purchasing a new machine to meet increasing demand. The relevant details of three machines are provided below. Assume all sales are cash transactions. Corporate income-tax rate is 31%. Interest on capital may be assumed to be 8%.

Particulars

Machine X1 (?)

Machine Y1 (?)

Machine Z1 (?)

Initial investment

30,00,000

34,00,000

32,00,000

Estimated annual sales

6,00,000

5,50,000

6,50,000

Cost of production:




Direct material

55,000

50,000

65,000

Direct labour

45,000

40,000

55,000

Factory overhead

70,000

65,000

80,000

Administration cost

25,000

20,000

30,000

Selling & Distribution cost

15,000

12,000

18,000

The economic life of Machine X1 is 3 years while it is 4 years for the other two. The scrap values are ?50,000, ?40,000, and ?45,000 respectively. You are required to identify the most profitable investment based on the payback period method.

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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

In Quadrant I, sin A = x. In Quadrant I, cos B = x. What...

Algebra
Q

Write in yr own words introduction and conclusion about rotary turbine aeroplane structure and system of...

Mechanical Engineering
Q

In a physiology class, a student mist dissect three different specimens. The student can select...

Basic Math
Q

If P 0 14 which of the The probability tha

Statistics
Q

Aidan is investigating how long his phone s battery lasts in hours for various brightness...

Statistics
Q

b Find the sum of 3x 4 and 2x 10

Algebra
Q

In a cashflow statement, is receipts from customers amount net of any returns? Or would...

Accounting
Q

Susquehanna Medical Center operates a general hospital in northeastern Pennsylvania. The medical center also rents...

Accounting
Q

Using the following accounts and balances, prepare the stockholders' Equity section of the balance sheet...

Accounting
Q

Transactions are first journalized and then posted to ledger accounts. In this exercise, however, your...

Accounting
Q

Arrange the following items in parentheses or a minus sign.) proper balance sheet presentation: (Amounts...

Finance
Q

Short answer:1. How does the default risk of commercial real estate loans vary across different...

Finance