Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Plz help with the unanswered question below e. Compute the costs of carrying inventory Cost of carrying inventory $ 66375 d. Compute the amortization expense

Plz help with the unanswered question below

image text in transcribedimage text in transcribed
e. Compute the costs of carrying inventory Cost of carrying inventory $ 66375 d. Compute the amortization expense on new plant and equipment Amortization expense $17700 e. Add together all the costs in parts b, c, and d Total cost $ 576,5771 L Compute income after taxes. Income after taxes $ PLO9571 g. I'l the firm has required return on investment of 15 percent, should it undertake the promotional campaign described throughout this problem? O No Problem 7-26 In the previous problem, if inventory had only been 2 times: a. What would be the new value for inventory investment? Inventory investment $ 354,009 b.1 What would be the return on investment? You need to recompute the total investment and the total costs of the campaign to work toward computing income after taxes. (Round the final answer to 1 decimal place.] Rate of return b.2 Should the campaign be undertaken? O Yes O NOApollo Data Systems is considering a promotional campaign that will increase annual credit sales by $708,030. The company has a 40' cost of goods sold and will require investments in accounts receivable, inventory, and plant and equipment. The bumover for each Accounts receivable Inventory Plant and equipment All $708,000 of the wins will be colectible. However, collection costs will be 3 percent of sales, and production and selling costs will be 75 percent of sales. The cost to carry inventory will be 19 percent of inventory. Amortization expense on plant and equipment will be 5 percent of plant and equipment. The tax rate is 30 percent Inventory is calculated insing cost of goods sold and not sales. a. Compute the investments in accounts receivable, inventory and plant and equipment based on the turnover matos. What is the total value of the investment made? Accounts receivable Inventory Plant and equipment Total Imarvtrent b. Compute the accounts receivable collection costs and production and selling costs and add the two figures together Collection cost Production and selling costs Total costs related to accounts receivable $ 56:7 740 c. Compute the costs of carrying inventory Cost of carrying inventory d. Compute the amortization expense on new plant and equipment Amortisation experts

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_2

Step: 3

blur-text-image_3

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 Information Systems Controls And Processes

Authors: Leslie Turner, Andrea B Weickgenannt, Mary Kay Copeland

4th Edition

1119577810, 9781119577812

More Books

Students also viewed these Accounting questions