Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. x company is thinking about expanding the producti

X Company is thinking about expanding the production of Product X and eliminating Product Y....

70.2K

Verified Solution

Question

Accounting

X Company is thinking about expanding the production of Product X and eliminating Product Y. Expanding sales of X should result in additional firm profits of $12,000 per year for the next 6 years, but will require the purchase of some additional equipment, costing $11,000. This equipment should be worth $3,300 at the end of 6 years.

By eliminating Product Y, the firm will lose the product's $5,000 annual contribution margin but will save $13,000 of annual fixed costs.

Assuming a discount rate of 7%, what is the net present value of expanding the production of Product X and eliminating Product Y?

A: $86,538 B: $115,095 C: $153,077 D: $203,592 E: $270,777 F: $360,134

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 one or two sentences describe the corrosion failure mode. What is one visual cue to...

Mechanical Engineering
Q

A coil of inductance 120 mH and unknown resistance and a 1.0 μF capacitor are connected...

Physics
Q

What is balanced pathogenicity? What happens to the interaction between the host and the virus?

Biology
Q

The equation for an alternating current is given by i 77 sin 314t Find the...

Physics
Q

Marina rend a drone and model airplane at the Auto-Models for Teens. The following system...

Basic Math
Q

Find the indefinite integral using the substitution x 4 sin 8 Remember to use absolute...

Calculus
Q

What is EFT and how does its use control cash and cash flow? What technology...

Accounting
Q

plz help asap, ill leave big like 5. Gina Lewis, age 16,...

Accounting
Q

I know it increases, just dont know by how much. Shiplt Corporation...

Accounting
Q

In recent years, Oriol Company has purchand three machines. Because of frequent compayee tumor in...

Accounting
Q

please answer all the following parts Required:...

Accounting
Q

Required information E4-12 and E4-13 Bunker makes two types of briefcase, fabric...

Accounting