Ask Question, Ask an Expert


Ask Financial Accounting Expert

Problem: Pappy’s Potato has come up with the new product, the Potato Pet (they are freeze-dried to last longer). Pappy’s paid $120,000 for a marketing survey to find out the viability of product. It is felt that Potato Pet will make sales of $725,000 per year. The fixed costs allocated with this will be $187,000 per year, and variable costs will amount to 20 percent of sales. The equipment required for production of the Potato Pet will cost $835,000 and will be depreciated in a straight-line value basis for the 4 years of the product life (as with all fads, it is felt the sales will end rapidly). This is the only initial cost for the production. Pappy’s is in 40 percent tax bracket and has required return of 13 percent.

problem1. Compute the payback period for this project

problem2. Compute the NPV for this project

problem3. Compute the IRR for this project

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M94212

Have any Question? 

Related Questions in Financial Accounting

The cash account of grande home improvement store shows the

The cash account of Grande Home Improvement Store shows the following: a debit on June 1 for $25,000; a credit on June 5 for $10,000, a debit on June 16 for $14,000, and a credit on June 27 for $8,000. What is the balanc ...

Graphing costs and interpreting regression output adapted

Graphing costs and interpreting regression output (adapted from CMA exam). Management of Tino's Tacos wants to estimate overhead costs accurately to plan the company's operations and assess its financial needs. A trade a ...

An important tool in predicting the volume of activity the

An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is: Target income analysis. Cost-volume-profit analysis. Least-squares regression analys ...

Larned corporation recorded the following transactions for

Larned Corporation recorded the following transactions for the just completed month. a. $75,000 in raw materials were purchased on account. b. $73,000 in raw materials were requisitioned for use in production. Of this am ...

Complete and detailed solutions requiredag bio tech abt was

Complete and detailed solutions required Ag Bio Tech (ABT) was organized on January 1, 2013, by four friends. Each organizer invested $12,500 in the company and, in turn, was issued 10,000 shares of common stock. To date ...

In a statement of cash flows which of the following would

In a statement of cash flows, which of the following would be classified as an investing activity? a. The sale of the company's own common stock for cash. b. Interest paid to a lender. c. The sale of equipment. d. The is ...

A what is a sinking fund provision consider two bonds a and

a) What is a sinking fund provision? Consider two bonds, A and B, which are identical in every respect except that Bond A has a sinking fund and Bond B does not. Which bond would have the higher required rate of return ( ...

A common concept that many students struggle with is the

A common concept that many students struggle with is the idea of comprehensive income. In your own words, explain what this concept means. Can you provide direct examples of items that affect comprehensive income but are ...

Kitchen electrics uses a perpetual inventory system the

Kitchen Electrics uses a perpetual inventory system. The following are three recent merchandising transactions: Apr. 10            Purchased 10 refrigerators from Polar Co. on account. Invoice price, $600 per       unit, ...

Dividing partnership net income steve jack and chelsy

Dividing Partnership Net Income Steve Jack and Chelsy Stevens formed a partnership, dividing income as follows: Annual salary allowance to Jack of $45,000. Interest of 10% on each partner's capital balance on January 1. ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate