Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I would like assistance on finding problems 1-4. Please help Questions 1 E. 2 ask for cash flows only,r no present values. Since this problem

I would like assistance on finding problems 1-4. Please help

image text in transcribed
Questions 1 E. 2 ask for cash flows only,r no present values. Since this problem is a capital budgeting problem, they are not worth any points, and you have unlimited tries. Questions 3 E 4 require that you use the correct cash flows from 1 and 2 to determine the net present values of the two alternatives. You should use the present value tables In the Coursepack. The Brisbane Manufacturing Company produces a single model ofa CD player. Each player is sold for $195 with a resulting contribution margin of $?1. Brisbane's management is considering a change in its quality control system. Currently, Brisbane spends $38,500 a year to inspect the CD players. An average of 2,000 units turn out to be defective 1,600 of them are detected in the inspection process and are repaired for $15. If a defective CD player is not identied in the inspection process, the customer who receives it is given a full refund of the purchase price. The proposed quality control system involves the purchase of an :ac-ray machine for $190,000. The machine would last for ve years and would have salvage value at that time of $19,000. Brisbane would also spend $620,000 immediately to train workers to better detect and repair defective units. Annual inspection costs would increase by $23,000. This new control system would reduce the number of defective units to 300 per yea r. 315 of these defective units would be detected and repaired at a cost of $49 per unit. Customers who still received defective players would be given a refund equal to oneandahalf times the purchase price. Questions 1 o 2 [0 points; unlimited tries] 1. What is the Year 3 cash ow if Brisbane keeps using its current system? Submit Answer THEE [HEB 2. What is the Year 3 cash ow if Brisbane replaces its current system? Submit Answer Tries DISH Questions 3 s 4 [5 points each; 5 tries each] 3. Assuming a discount rate of 8%, what is the net present value if Brisbane keeps using its current system? Submit Answer Tries [HE 4. Assuming a discount rate ofB'iia, what is the net present value if Brisbane replaces its current system"!I Submit Answer Tries DIE

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting What the Numbers Mean

Authors: David Marshall, Wayne McManus, Daniel Viele

12th edition

007802529X, 1259969525, 978-1260565492

More Books

Students also viewed these Accounting questions

Question

Would I be a more effective student if I spent less time online?

Answered: 1 week ago

Question

Engage everyone in the dialogue

Answered: 1 week ago