Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Brisbane Manufacturing Company produces a single model of a player. Each player is sold for $184 with a resulting contribution margin of $80. Brisbane's

image text in transcribed
The Brisbane Manufacturing Company produces a single model of a player. Each player is sold for $184 with a resulting contribution margin of $80. Brisbane's management is considering a change in its quality control system. Currently, Brisbane spends 5:38,000 a year to inspect the CD players. An average of 2,100 unts turn out to be defective 14 of them are detected in the Inspection process and are repaired for $75. If a defective CD player is not identified 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 x-ray machine for $180,000. The machine would last for four years and would have salvage value at that time of $19.000. Brisbane would sa spera $430,000 immediately to train workers to better detect and repair defective units. Annus Inspection costs would increase by $24,000. Brisbane expects this new control system to reduce the number of defective units to 380 per year, 315 of these defective units would be detected and repaired at a cost of only 540 per unit. Customers who still receive defective players wil be given a refund equal to 120% of the purchase price Questions 1 & 2 [0 points, unlimited tries) 1. What is the Year 2 cash flow if Brisbane keeps using its current system? 430 Sunwincorrect. Thes 1/99 Previous Tres 2. What is the Year 2 cash flow Brisbane replaces its current system? Sutet Tries 0/99 Questions 3 4 [5 points each tries each) 3. Assuring a discount rate of 8%, what is the net present value If Brisbane keeps using its current system? Mate Tries 0/5 4. Assuming a discount rate of 8%, what is the net present value if Brisbane replaces its current system

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

More Books

Students also viewed these Accounting questions

Question

4. Describe the role of narratives in constructing history.

Answered: 1 week ago

Question

1. Identify six different types of history.

Answered: 1 week ago