For each of the following types of business, indicate why the manager needs to know the unit cost information
Managers of a Need to know the cost to
Bakery
Computer manufacturer
Bank
Seamstress
What will be an ideal response
Managers of a Need to know the cost to
Bakery Make a cake
Computer manufacturer Make a computer
Bank Service a customer's account
Seamstress Make a garment
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The phrase "price to rent money" is sometimes used to refer to ________
A) historical prices B) compound rates C) discount rates D) interest rates
Creighton Industries is considering the purchase of a new strapping machine, which will cost
$150,000, plus an additional $10,500 to ship and install. The new machine will have a 5-year useful life and will be depreciated to zero using the straight-line method. The machine is expected to generate new sales of $45,000 per year and is expected to save $16,000 in labor and electrical expenses over the next 5-years. The machine is expected to have a salvage value of $20,000. Creighton's income tax rate is 35%. Creighton uses a 12.5% discount rate for capital budgeting purposes. What is the machine's NPV? A) $22,153 B) $29,888 C) $27,894 D) $25,062