Required information Exercise 15-32 Pricing, Advertising, and Special-Order Decisions (LO 15-10) [The fol/owing information applies to the questions displayed below. ] Corrientes Company produces a single product in its Buenos Aires plant that currently sells for 5.80 p per unit, Fixed costs are expected to amount to 57000 p for the year, and all variable manufacturing and administrative costs are expected to be incurred at a rate of 2.40 p per unit. Corrientes has two salespeople who are paid strictly on a commission basis. Their commission is 10 percent ofthe sales revenue they generate. (Ignore income taxes.) (p denotes the peso, Argentina's national currency, Many countries use the peso as their national currency, On the day this exercise was written, Argentina's peso was worth $0.104 US dollar.) Exercise 15-32 Part1 Required: 1. Suppose management alters its current plans by spending an additional amount of 4600 p on advertising and increases the selling price to 6.80 p per unit. Calculate the profit on 61,000 units. (Do not round intermediate calculations. Enter your answer in pesos.) Prot ,0 Exercise 17-21 Relative-Sales-Value Method; Joint Cost Allocation (LO 17-4) Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows: Quantity at Sales Price Joint Cost Cereal Split-Off Point per Kilogram $93, 000 Yummies 12, 300 kilograms $6.30 Crummies 8 , 300 kilograms 7.80 Required: Use the relative-sales-value method to allocate Breakfasttime Cereal Company's joint production cost between Yummies and Crummies. (Round intermediate calculations of Relative Proportions to 3 decimal places and final answers to the nearest dollar amount.) Sales Value at Allocation of Split-off Point Joint Cost Yummies Crummies TotalRequired information Exercise 15-32 Pricing, Advertising. and Special-Order Decisions (L0 15-10) [The following information applies to the questions displayed below] Corrientes Company produces a single product in its Buenos Aires plant that currently sells for 5.80 p per unit. Fixed costs are expected to amount to 57,000 p for the year, and all variable manufacturing and administrative costs are expected to be incurred at a rate of 240 p per unit. Corrientes has two salespeople who are paid strictly on a commission basis. Their commission is 10 percent ofthe sales revenue they generate. (Ignore income taxes.) (p denotes the peso, Argentina's national currency. Many countries use the peso as their national currency. On the day this exercise was written, Argentina's peso was worth $0,104 US. dollar.) Exercise 15-32 Part 2 2. The Sorde Company hasjust approached Corrientes to make a special one-time purchase of18,000 units. These units would not be sold by the sales personnel, and, therefore, no commission would have to be paid. What is the price Corrientes would have to charge oer unit on this special order to earn additional profit of 43,200 p? (Do not round intermediate calculations Round your answer to 2 decimal places. Enter your answer in pesos.) Sales price required I p per unit Exercise 16-24 Net Present Value (Section 1) (L0 16-1) Jack and Jill's Place is a nonprofit nursery school run by the parents ofthe enrolled children. Since the school is out oftown, it has a well rather than a city water supply. Lately, the well has become unreliable, and the school has had to bring in bottled drinking water. The school's governing board is considering drilling a new well (at the top of the hill, naturally). The board estimates that a new well would cost $2,950 and save the school $550 annually for 10 years. The school's hurdle rate is 8 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: Compute the new well's net present value. Should the governing board approve the new well? (Round your final answer to the nearest dollar amount.) Net present value Approve? Exercise 16-25 Internal Rate of Return (Section 1) (L0 16-1) Jack and Jill's Place is a nonprofit nursery school run by the parents of the enrolled children. Since the school is out oftown, it has a well rather than a city water supply. Lately, the well has become unreliable, and the school has had to bring in bottled drinking water. The school's governing board is considering drilling a new well (at the top of the hill, naturally). The board estimates that a new well would cost $3,842 and save the school $680 annually for 10 years. The school's hurdle rate is 7 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: Compute the internal rate of return on the new well. Should the governing board approve the new well? Internal rate of return Approve? Exercise 16-26 Internal Rate of Return; Uneven Cash Flows (Section 1) (L0 16-1) The trustees of the Danube School ofArt and Music, located in Tuttlihgen, Germany, are considering a major overhaul of the school's audio system. With or without the overhaul, the system will be replaced in two years. If an overhaul is done now, the trustees expect to save the following repair costs during the next two years: year 'I, 4,400 euros; year 2, 6,400 euros. The overhaul will cost 8,780 euros. (The euro is used in most European markets.) Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: Use trial and error to compute the internal rate of return on the proposed overhaul. (Hint: The NPV of the overhaul is positive if an 10 aercent discount rate is used, but the NPV is negative if a 18 percent rate is used.) Internal rate of return % Future Value and Present Value Tables Table Future Value of $1.00(1 + r)n Period 4% 6% 8% 10% 12% 14% 20% 1.040 1.060 1.080 1.100 1.120 1.140 1.200 2 1.082 1.124 1.166 1.210 254 1.300 1.440 3 1.125 1.191 1.260 1.331 1.405 1.482 1.728 4 1.170 1.263 1.361 1.464 1.574 1.689 2.074 5 1.217 1.338 1.469 1.611 1.762 1.925 2.488 6 1.265 1.419 1.58/ 1.772 1.9/4 2.195 2.980 7 1.316 1.504 1.714 1.949 2.211 2.502 3.583 S 1.369 1.594 1.851 2.144 2.476 2.853 4.300 9 1.423 1.690 1.999 2.359 2.773 3.252 5.160 10 1.480 1.791 2.159 2.594 3.106 3.707 6.192 11 .540 1.898 2.332 2.853 3.479 1,226 7.430 12 1.601 2.012 2.518 3.139 3.896 4.818 8.916 13 1.665 2.133 2.720 3.452 1.364 5.492 10.699 14 1,732 2.261 2.937 3.798 4.887 6.261 12.839 15 1.801 2.397 3.172 4.177 5.474 7.138 15.407 20 2.191 3.207 4.661 6.728 9.646 13.743 $8.338 30 3.243 5.744 10.063 17.450 29.960 50.950 237.380 10 4.801 10.286 21.725 45.260 93.051 188.880 1,469.800 Table II Future Value of a Series of $1.00 Cash Flows (Ordinary Annuity)- (1 + r)" - 1 Period 4% 6% 8% 10% 12% 14% 20% 1.00 1.00 1.000 1.000 1.000 .00 1.000 2.04 2.060 2.080 2.100 2.120 2.140 2.220 3.12 3.18 3.246 3.310 3.374 3.440 3.640 4.24 4.375 4.506 4.641 4.779 4.921 5.36 .416 5.637 5.867 6.105 5.35 6.610 7.442 6.63. 6.975 7.336 7.716 3.11 8.536 9.930 7.898 8.394 8.923 9.487 10.089 10.730 12.916 9.214 9.098 10.637 11.436 12.300 13.233 16.499 10.583 11.491 12.488 13.580 14.776 16.085 20.799 10 12.006 13.18 14.487 15.938 17.549 19.337 25.959 11 13.486 14.972 16.64 18.531 20.65 23.04 32.150 15.026 16.870 18.977 21.385 24.133 27.271 39.580 13 16.627 18.882 21.495 24.523 28.029 32.089 48.497 14 18.292 21.015 24.215 27.976 32.393 37.581 59.196 15 20.024 23.276 27.152 31.773 37.280 43.84 72.035 20 29.778 36.778 45.762 57.276 75.052 91.025 186.690 30 6.085 79.058 113.283 164.496 241.330 356.790 1,181.900 40 5.026 154.762 259.057 442.597 767.090 1,342.000 7,343.900 Table III Present Value of $1.00 - ( 1 + 7 ) " Period 4% 6% 8% 10% 12% 14 % 16% 18% 22% 24% 26% 30% 32% 962 .943 .926 .909 .893 .877 .862 .847 .833 .820 .806 .794 781 .769 .758 925 890 857 826 797 769 .743 .718 694 672 650 630 610 592 574 889 840 .794 .751 ,712 .675 .641 .609 579 551 .524 500 477 455 .435 855 .792 .735 683 .636 .592 .552 .516 482 451 .423 .397 .373 .350 .329 822 .747 681 621 567 .519 .476 .437 402 370 .341 .315 .291 269 .250 6 790 .705 .630 .564 .507 .456 .410 .370 .335 .303 .275 .250 .227 .207 .189 760 .665 .583 .513 .452 .400 .354 .314 .279 .249 .222 . 198 .178 .159 .143 731 627 .540 .467 .404 .351 .305 .266 .233 .204 .179 .157 139 .123 .108 703 .592 .500 .424 .361 .308 .263 .225 194 .167 .144 .125 . 108 .094 .082 10 676 .558 .463 .386 .322 .270 .227 .191 .162 .137 .116 .099 085 .073 .062 11 650 .527 .429 .350 .287 .237 .195 .162 135 .112 .094 .079 .066 .056 .047 12 625 .497 .397 .319 .257 .208 .168 .137 112 .092 .076 .062 .052 .043 036 13 601 .469 .368 .290 .229 . 182 .145 .116 093 075 .061 050 040 .033 .027 14 577 .442 .340 .263 205 160 .125 .099 078 062 049 .039 032 .025 .021 15 555 417 .315 .239 . 183 .140 .108 084 065 051 040 031 .025 .020 .016 20 456 .312 .215 .149 .104 073 .051 .037 .026 .019 .014 .010 .007 .005 .004 .308 4 .099 .057 .033 020 .012 .007 .004 .003 .002 .001 .001 .208 .097 .046 .022 .011 .005 .003 .001 .001 Table IV Present Value of Series of $1.00 Cash Flows - (1 - (1 + )) Period 4% 6% 8% 10% 12% 14% 18% 20% 22% 24% 25% 2 28% 30% 0.96 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 0.806 0.800 0.794 0.781 0.769 1.886 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 1.492 1.457 1.440 1.424 1.392 1.361 2.77 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 2.042 1.981 1.952 1.923 1.868 1.816 3.630 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 2.494 2.404 2.362 2.320 2.241 2.166 4.452 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 2.864 2.745 2.689 2.635 2.532 2.436 5.242 4.917 4.623 4.355 3.889 3.685 3.498 3.326 3.167 3.020 2.951 2.759 2.643 6.00 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 3.416 3.242 3.161 3.083 2.937 2.802 Co .73 6.210 5.747 5.335 4.968 4.639 4 4.344 4.078 3.837 3.619 3.421 3.329 3.241 3.076 2.925 7.43 5.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 3.786 3.566 3.463 3.366 3.184 3.019 8.11 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 3.923 3.682 3.571 3.465 3.269 3.092 8.760 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 4.035 3.776 3.656 3.544 3.335 3.147 9.38 8.384 7.536 6.814 6.194 5.660 5.197 4.793 4.439 4.127 3.851 3.725 3.606 3.387 3.190 9.986 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 4.203 3.912 3.780 3.656 3.427 3.223 10.563 9.295 8.244 7.367 6.628 6.002 5.468 5.008 4.611 4.265 3.962 3.824 3.695 3.459 3.249 11.118 9.712 8.559 7.606 6.811 6.142 5.575 5.092 4.675 4.315 4.001 3.859 3.726 3.483 3.268 20 13.590 11.470 9.818 8.514 7.469 6.623 5.929 5.353 4.870 4.460 4.110 3.954 3.808 3.546 3.316 30 17.292 13.765 11.258 9.427 8.055 7.003 6.177 5 5.517 4 7 4.979 4.534 4.160 3.995 3.842 3.569 3.332 10 19.793 15.046 11.925 9.779 8.244 7.105 6.234 5.548 4.997 4.544 4.166 3.999 3.846 3.571 3.333Future Value and Present Value Tables Table Future Value of $1.00(1 + r)n Period 4% 6% 8% 10% 12% 14% 20% 1.040 1.060 1.080 1.100 1.120 1.140 1.200 2 1.082 1.124 1.166 1.210 254 1.300 1.440 3 1.125 1.191 1.260 1.331 1.405 1.482 1.728 4 1.170 1.263 1.361 1.464 1.574 1.689 2.074 5 1.217 1.338 1.469 1.611 1.762 1.925 2.488 6 1.265 1.419 1.58/ 1.772 1.9/4 2.195 2.980 7 1.316 1.504 1.714 1.949 2.211 2.502 3.583 S 1.369 1.594 1.851 2.144 2.476 2.853 4.300 9 1.423 1.690 1.999 2.359 2.773 3.252 5.160 10 1.480 1.791 2.159 2.594 3.106 3.707 6.192 11 .540 1.898 2.332 2.853 3.479 1,226 7.430 12 1.601 2.012 2.518 3.139 3.896 4.818 8.916 13 1.665 2.133 2.720 3.452 1.364 5.492 10.699 14 1,732 2.261 2.937 3.798 4.887 6.261 12.839 15 1.801 2.397 3.172 4.177 5.474 7.138 15.407 20 2.191 3.207 4.661 6.728 9.646 13.743 $8.338 30 3.243 5.744 10.063 17.450 29.960 50.950 237.380 10 4.801 10.286 21.725 45.260 93.051 188.880 1,469.800 Table II Future Value of a Series of $1.00 Cash Flows (Ordinary Annuity)- (1 + r)" - 1 Period 4% 6% 8% 10% 12% 14% 20% 1.00 1.00 1.000 1.000 1.000 .00 1.000 2.04 2.060 2.080 2.100 2.120 2.140 2.220 3.12 3.18 3.246 3.310 3.374 3.440 3.640 4.24 4.375 4.506 4.641 4.779 4.921 5.36 .416 5.637 5.867 6.105 5.35 6.610 7.442 6.63. 6.975 7.336 7.716 3.11 8.536 9.930 7.898 8.394 8.923 9.487 10.089 10.730 12.916 9.214 9.098 10.637 11.436 12.300 13.233 16.499 10.583 11.491 12.488 13.580 14.776 16.085 20.799 10 12.006 13.18 14.487 15.938 17.549 19.337 25.959 11 13.486 14.972 16.64 18.531 20.65 23.04 32.150 15.026 16.870 18.977 21.385 24.133 27.271 39.580 13 16.627 18.882 21.495 24.523 28.029 32.089 48.497 14 18.292 21.015 24.215 27.976 32.393 37.581 59.196 15 20.024 23.276 27.152 31.773 37.280 43.84 72.035 20 29.778 36.778 45.762 57.276 75.052 91.025 186.690 30 6.085 79.058 113.283 164.496 241.330 356.790 1,181.900 40 5.026 154.762 259.057 442.597 767.090 1,342.000 7,343.900 Table III Present Value of $1.00 - ( 1 + 7 ) " Period 4% 6% 8% 10% 12% 14 % 16% 18% 22% 24% 26% 30% 32% 962 .943 .926 .909 .893 .877 .862 .847 .833 .820 .806 .794 781 .769 .758 925 890 857 826 797 769 .743 .718 694 672 650 630 610 592 574 889 840 .794 .751 ,712 .675 .641 .609 579 551 .524 500 477 455 .435 855 .792 .735 683 .636 .592 .552 .516 482 451 .423 .397 .373 .350 .329 822 .747 681 621 567 .519 .476 .437 402 370 .341 .315 .291 269 .250 6 790 .705 .630 .564 .507 .456 .410 .370 .335 .303 .275 .250 .227 .207 .189 760 .665 .583 .513 .452 .400 .354 .314 .279 .249 .222 . 198 .178 .159 .143 731 627 .540 .467 .404 .351 .305 .266 .233 .204 .179 .157 139 .123 .108 703 .592 .500 .424 .361 .308 .263 .225 194 .167 .144 .125 . 108 .094 .082 10 676 .558 .463 .386 .322 .270 .227 .191 .162 .137 .116 .099 085 .073 .062 11 650 .527 .429 .350 .287 .237 .195 .162 135 .112 .094 .079 .066 .056 .047 12 625 .497 .397 .319 .257 .208 .168 .137 112 .092 .076 .062 .052 .043 036 13 601 .469 .368 .290 .229 . 182 .145 .116 093 075 .061 050 040 .033 .027 14 577 .442 .340 .263 205 160 .125 .099 078 062 049 .039 032 .025 .021 15 555 417 .315 .239 . 183 .140 .108 084 065 051 040 031 .025 .020 .016 20 456 .312 .215 .149 .104 073 .051 .037 .026 .019 .014 .010 .007 .005 .004 .308 4 .099 .057 .033 020 .012 .007 .004 .003 .002 .001 .001 .208 .097 .046 .022 .011 .005 .003 .001 .001 Table IV Present Value of Series of $1.00 Cash Flows - (1 - (1 + )) Period 4% 6% 8% 10% 12% 14% 18% 20% 22% 24% 25% 2 28% 30% 0.96 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 0.806 0.800 0.794 0.781 0.769 1.886 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 1.492 1.457 1.440 1.424 1.392 1.361 2.77 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 2.042 1.981 1.952 1.923 1.868 1.816 3.630 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 2.494 2.404 2.362 2.320 2.241 2.166 4.452 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 2.864 2.745 2.689 2.635 2.532 2.436 5.242 4.917 4.623 4.355 3.889 3.685 3.498 3.326 3.167 3.020 2.951 2.759 2.643 6.00 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 3.416 3.242 3.161 3.083 2.937 2.802 Co .73 6.210 5.747 5.335 4.968 4.639 4 4.344 4.078 3.837 3.619 3.421 3.329 3.241 3.076 2.925 7.43 5.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 3.786 3.566 3.463 3.366 3.184 3.019 8.11 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 3.923 3.682 3.571 3.465 3.269 3.092 8.760 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 4.035 3.776 3.656 3.544 3.335 3.147 9.38 8.384 7.536 6.814 6.194 5.660 5.197 4.793 4.439 4.127 3.851 3.725 3.606 3.387 3.190 9.986 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 4.203 3.912 3.780 3.656 3.427 3.223 10.563 9.295 8.244 7.367 6.628 6.002 5.468 5.008 4.611 4.265 3.962 3.824 3.695 3.459 3.249 11.118 9.712 8.559 7.606 6.811 6.142 5.575 5.092 4.675 4.315 4.001 3.859 3.726 3.483 3.268 20 13.590 11.470 9.818 8.514 7.469 6.623 5.929 5.353 4.870 4.460 4.110 3.954 3.808 3.546 3.316 30 17.292 13.765 11.258 9.427 8.055 7.003 6.177 5 5.517 4 7 4.979 4.534 4.160 3.995 3.842 3.569 3.332 10 19.793 15.046 11.925 9.779 8.244 7.105 6.234 5.548 4.997 4.544 4.166 3.999 3.846 3.571 3.333