Bus5110 – managerial accounting | Accounting homework help

  

A manufacturing company is evaluating two options for new equipment to introduce a new product to its suite of goods. The details for each option are provided below:

Option 1   

· $65,000 for equipment with useful life of 7 years and no salvage value.   

· Maintenance costs are expected to be $2,700 per year and increase by 3% in Year 6 and remain at that rate.  

· Materials in Year 1 are estimated to be $15,000 but remain constant at $10,000 per year for the remaining years.  

· Labor is estimated to start at $70,000 in Year 1, increasing by 3% each year after.  

Revenues are estimated to be: 

   

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

 

  75,000

    100,000

    125,000

    150,000

    150,000

    150,000

Option 2 

· $85,000 for equipment with useful life of 7 years and a $13,000 salvage value 

· Maintenance costs are expected to be $3,500 per year and increase by 3% in Year 6 and remain at that rate. 

· Materials in Year 1 are estimated to be $20,000 but remain constant at $15,000 per year for the remaining years. 

· Labor is estimated to start at $60,000 in Year 1, increasing by 3% each year after. 

Revenues are estimated to be:

 
 

   

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

 

    80,000

    95,000

    130,000

    140,000

    150,000

    160,000

 
 

The company’s required rate of return is 8%.

Management has turned to its finance and accounting department to perform analyses and make a recommendation on which option to choose. They have requested that the four main capital budgeting calculations be done: NPV, IRR, Payback Period, and ARR for each option.

For this assignment, compute all required amounts and explain how the computations were performed. Evaluate the results for each option and explain what the results mean. Based on your analysis, recommend which option the company should pursue.

Superior papers will:

· Perform all calculations correctly.

· Articulate how the calculations were performed, including from where values used in the calculations were obtained.

· Evaluate the results computed and explain the meaning of the results, including why certain measurements are more accurate than others.

· Recommend which option to pursue, supported by well-thought-out rationale, and considering any other factors that could impact the recommendation.

Be sure to use APA formatting in your paper.  Purdue University’s Online Writing Lab (OWL) is a free website that provides excellent information and resources for understanding and using the APA format and style. The OWL website can be accessed here: https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_style_introduction.html

This assignment will be assessed using the BUS 5110 Unit 6 Written Assignment rubric.

Punctual Essays
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.