Engi Sola Corp. Manufactures solar engines for tractor trailers. Given the fuel savings available, new orders for 125 units have been made by customers requesting credit. The variable cost is $9,700 per unit, and the credit price is $11,100 each. Credit is extended for one period. The required return is 1.9% per period. If Engi Sola extends credit, it expects that 30% of the customers will be repeat customers and place the same order every period forever, and the remaining customers will be one-time orders.

Answers

Answer 1

Answer:

The net present value (NPV) of the decision to grant credit is $2,938,157.89.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Engi Sola Corp. Manufactures solar engines for tractor trailers. Given the fuel savings available, new orders for 125 units have been made by customers requesting credit. The variable cost is $9,700 per unit, and the credit price is $11,100 each. Credit is extended for one period. The required return is 1.9% per period. If Engi Sola extends credit, it expects that 30% of the customers will be repeat customers and place the same order every period forever, and the remaining customers will be one-time orders.

Calculate the NPV of the decision to grant credit.

The explanation of the answer is now given as follows:

Number of new orders = 125 units

Percentage of repeat order = 30%

Number of order that will be repeated forever = Number of new orders * Percentage of repeat order = 125 * 30% = 37.50 units

Credit price per unit = $11,100

Variable cost per unit = $9,700

Contribution margin per unit = Credit price per unit - Variable cost per unit = $11,100 - $9,700 = $1,400

Total contribution for all new order = Number of new orders * Contribution margin per unit = 125 * $1,400 = $175,000

Total contribution margin for order that will be repeated forever = Contribution margin per unit * Number of order that will be repeated forever = $1,400 * 37.50 = $52,500

Net present value (NPV) of total contribution margin for order that will be repeated forever = Total contribution margin for repeated order forever / Required return = $52,500 / 1.9% = 2,763,157.89

Net present value (NPV) of the decision to grant credit = Total contribution for all new order + NPV of total contribution margin for order that will be repeated forever = $175,000 + 2,763,157.89 = $2,938,157.89

Therefore, the net present value (NPV) of the decision to grant credit is $2,938,157.89.


Related Questions

3. Which of the following is not a characteristic of a service? (1 point)
O marketability
O variability
O inseparability
O intangibility

Answers

Answer:

marketability is not correct

Explanation:

Four characteristics of service are;

intangibility,

inseparability,

variability and.

perishability.

The characteristic of the service does not include marketability. As services are intangible so they are not marketed or shown to the customer physically.

What is service?

Someone or something that is intended to assist individuals who are assisting others is defined as a service. Services are not physically presented or seen by the people.

It is the experience felt by the customers.

Thus, option A is correct.

For further details about services refer to this link:

https://brainly.com/question/25464662

Timothy Carter has net monthly income of $3,800. He has a monthly auto loan payment of $350, a student loan payment of $150, a mortgage payment of $1,200, and a credit card minimum payment of $45. What is his debt-payments-to-income ratio

Answers

Answer:

45.9%

Explanation:

The computation of the debt payment to income ratio is as follows:

Income = $3,800

And,

Debt payment is

= auto loan payment + student loan payment +mortgage payment + credit card payment

= $350 + $150 + $1200 + $45

= $1745

So,  

Debt payment to income ratio is

= Debt payment ÷  income

= $1,745 ÷ $3,800

= 0.459

= 45.9%

ANSWER ASAP Which of the following may help you protect against identity theft? A. Carrying your Social Security card at all times B. Clicking on pop-up windows to verify their information C. Contacting your credit card company if you don’t receive bills D. Including your name in your online passwords

Answers

Explanation:

I think A. Because it is the only safe way to protect yourself even in the credit card company people might steal your identity and they dont know. So I say A

Answer:

Its C) contacting your credit card company if you don't receive bills

Explanation:

EDGE 2021

The marginal product of an additional worker multiplied by the price of the firm’s output is considered the ________.

Answers

Marginal revenue product of labor (MRPL)

Which type of reference group influence usage, while creating advertisements, has raised the most ethical concerns since it plays on people's insecurities and fears

Answers

Identification influence

who created the periodic table​

Answers

Answer:

Dmitri Mendeleev

Explanation:

Hope this helped, Have a Wonderful Day!!

You research finds 5,400 potential customers for your bowling alley, and you think each is willing to spend $10, five times per year, to bowl. What is the total potential revenue represented by these customers?

Answers

Answer:

$270,000

Explanation:

Potential customers are 5400

Each customer can spend $10; 5 times per year.

Therefore, each customer will spend  $10 x5 = $50 per year.

Potential revenue = $50 per customer x 5400 customers

=$270,000 per year

What is the most financially dangerous way to pay for college?

A.Scholarships

B.Cash

C.Credit cards

D.Federal students loans

Answers

Answer:

I think it would be credit card

Explanation:

I don't know if I'm correct though

Credit cards is the most financially dangerous way to pay for college. Fees and interest charges are possible. person will be legally obligated to repay debt.

What is one reason why credit cards can be dangerous?

Using credit cards and not paying them off on a monthly basis can harm credit. Aside from the high interest rate, the major disadvantages of using credit.

When a person don't have the cash to pay it off later include damaging credit, straining relationships with family and friends, and, ultimately, bankruptcy.

Thus, option C is correct.

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Someone please help will mark as brainliest

Answers

24 days is the answer

Answer:

divide by the table and lilly pads

Explanation:

well how long is the table you divide the table from the number of lilly pads and there you go

Explain how insurance companies use statistics.

Answers

Answer:

 Statistics is used to determine what risk an insured poses to an insurance company, what percentage of policies is likely to pay out, and how much money a company can expect to pay out in claims

Martha has $10,000 saved and wants to attend a college with a current tuition of $10,000 a year. She will graduate from high school in five years. Roughly how much more will Martha need to save for one-year’s tuition to account for an annual rate of inflation of 3%?

$1,590.00
$1,255.00
$300.00
$3,000.00

Answers

Answer:

$1,590.00

Explanation:

Martha has $10,000 saved one. She will join college after 5 years.

Tuition for one year is $10,000. Inflation rate is 3%

The applicable formula is A = P ( 1+ r) ^n

Where A = amount after 5 years

P= principal amount $10,000

r= interest rate 3% of 0.03

n = 5 years

A= $10,000( 1+ 0.03) ^5

A = $10,000 ( 1.03)^5

A= $10,000 x 1.159

A= 11,590.00

Marthe already has $10,000. She will need  11,590.00 - $10,000 more

=$1,590.00

The development of market power by a firm is considered to be a market failure because firms with market power will

Answers

The correct answer is that firms with market power will produce less and charge a higher price than what would be socially optimal.

to start a new business, a sole proprietor must meet a small number of government. Which of the following is not one of them

A. Site permit
B. Business license
C. Name
D. Work a minimum of 30 hours

Answers

Answer:

d

Explanation:

D. Work a minimum of 30 hours

I want to sell homework answers but I need to contact people without people finding out I did

Answers

Answer:

sell?

Explanation:

HELP MEEEE


A family buys a new home for $150,000. However, they also have to set aside
an extra $1,500 to pay to the local government for owning the house. This is
the result of the:
A. estate tax.
B. sales tax.
C. income tax.
D. property tax.

Answers

Answer:

Property tax

Explanation:

This is the answer from my according because under construction properties tax is 12%

P R Ø P Э R T Y TAX

Answer right there ⬆️

What is most likely to push the price of a company's stock higher?


an increase in demand for the stocks of similar companies


an increase in tariffs paid by the company's competitors


an increase in demand for the company's stock


an increase in the exchange rate for the U.S. dollar

Answers

Answer:

i would say between 1  and 2! you choose

Explanation: when companies  have competitors they want to attract as much as they can they do this by lowering prices or having a large selection in stock! For example Gas Stations you would always see two right across from each other they are most likely competing for customers so one can lower prices for gas to attract buyers or just have a new stock of goods!

Answer:

an increase in demand for the company's stock

Explanation:

bc i took the test

Sara wants to purchase new equipment for her home office. The sales tax rate that will apply when she makes her purchase is 6%. Here is a list of items she wants to purchase:

keyboard, $9.99
mouse, $14.99
22-inch monitor, $99.99
chair, $129.99
If Sara has $275 to spend on new equipment for her home office, she ____
be able to purchase all of the items on her list because the total of her purchase after applying sales tax is ____
BLANK ONE:
Will
Will not

BLANK TWO:
$254.96
$270.26
$272.81
$277.91

$

Answers

Answers:

Blank One: WillBlank Two:  $270.26 (choice B)

=========================================================

Explanation:

Add up the prices given to get

9.99+14.99+99.99+129.99 = 254.96

This is the total amount before tax.

Now let's calculate the tax based on this subtotal.

6% of 254.96 = 0.06*254.96 = 15.2976 which rounds to 15.30. So the sales tax is $15.30 which is added on top of the previous subtotal which gets us 254.96+15.30 = 270.26

A different way to get this is to multiply 254.96 by 1.06 and you should get 270.2576 which rounds to 270.26

Assuming there are no other taxes, fees or surcharges, the value $270.26 is the grand total that Sara will have to pay if she wants all of those items.

Since $270.26 is smaller than $275, this means she will be able to purchase all of the items. Her change will be 275-270.26 = 4.47 dollars.

TRUE OR FALSE: A mathematics professor at a university would fall under both the Education and Training career cluster and the STEM career cluster.

Answers

Answer is : True
Explanation: none

5. When might a company decide that it needs to hire a human resource professional?​

Answers

Answer:

See Below

Explanation:

Below are a few reasons why a business might consider hiring a trained HR officer

It is recommended to hire a Human resource specialist once a company has 50 employees and above. When a business has over 50 employees, it needs someone trained to manage their welfare and other human resources issues.

When a company is growing or expanding rapidly, it requires to employ more people.  No matter the size of a business, when a business is hiring people frequently, it needs an HR officer to coordinate the recruitment process.

If a manager spends over 3 hours a day handling employee issues, then it's time to employ a trained HR officer. This gives the manager time to focus on their core mandate.  A dedicated specialist will be best suited to address employee issues, which is beneficial to both the company and the employees.  

Yuto owns a souvenir shop in Tokyo. He wants to reach English speaking tourists in his city during certain hours of the day. Which three areas of his Search campaign does Yuto need to adjust to achieve this goal? (Choose three.)

Answers

Answer:

Location targeting

Ad scheduling

Language targeting

Explanation:

Yuto try three new and improve methods, Location targeting , Ad scheduling ,Language targeting to reach English speaking tourists.

By using these techniques, Yuto focus on specific target and specific location for target his tourist .

The three areas of his Search campaign does Yuto need to adjust to achieve this goal are location targeting, language targeting, and Ad scheduling. The correct options are options B, C, and E.

Language targeting allows one to target the ads to people who use third-party sites based on the language they speak.

An ad schedule is a schedule that allows one to show ads or modify bids during specific times. One can create up to 6 ad schedules in an account per day, per campaign.

Location targeting allows one to choose where he/she wants to display an ad. By default the ads can be shown to people who are in, regularly visit, or have expressed interest in the desired locations.

Thus, the correct options are B, C, and E.

To learn more about language targeting, refer to the link:

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The given questions do not have the options mentioned. The complete question is given below.

Yuto owns a souvenir shop in Tokyo. he wants to reach English-speaking tourists in his city during certain hours of the three areas of his search campaign does Yuto need to adjust to achieve this goal? (choose three.)select 3 correct responses shared

A) budgets ad

B) scheduling language

C) targeting network settings

D) location targeting

An income statement reports information over a period of time, indicating the financial progress of a business in earning a net income or net loss. (PG 182)

Answers

Answer:

True

Explanation:

An income statement is among the three important financial statements that a business prepares at the end of every financial year. It is divided into three main sections of revenues, expenses, and income.

The revenue section lists all sources of revenues and any adjustments to obtain the net revenue. The expenses section shows all business expenses and their total. The income section is the difference between revenue and expenses. A positive income means the made profits, while a negative income indicates losses.

What negative consequences might a company face if they failed to keep accurate financial records

Answers

Answer:

Taxes

Explanation: a negative consequence you may face is paying more taxes than what is called for, you have you pay it otherwise tax fraud is a thing. Not only that but when tax return comes around you won't get paid the full amount. Hope this helps.

Firestop Inspectors are encouraged to look for empty containers to confirm that a. The appropriate materials are being used b. The installed material containers are in sufficient quality to have been installed correctly c. The site is kept clean and containers are disposed of properly D both A and b

Answers

Answer:

D both A and b

Explanation:

For the fire inspectors, not only are they expected to confirm that appropriate materials are being used but also, to ensure that the quality are top notch. This is to prevent outbreak of fire. For example, in a place where metal bin with lid are to be used, if plastic bin is being used, there is high chances of fire outbreak occurring when a used cigarette stick is thrown into it.


Which of the following is NOT a primary reason for technology?
(A)Get tasks done quicker
(B)Make tasks easier
(C)Get tasks done more efficiently
(D)Make tasks more difficult

Answers

A primary reason for technology is the make a task more difficult

Answer:

D

Explanation:

technology was made so that we would do things more efficiently and with less effort, if the device that were created made tasks more difficult, we would have no need for it and it would probably be disreguarded. theres no reason to have technology that makes life more difficult

All the following were true of the American economy under Cotton Kingdom EXCEPT a the South reaped all the profits from the cotton trade. b 75 percent of the British supply of cotton came from the South. c quick profits from cotton drew planters to its economic enterprise. d the South produced more than half the entire world's supply of cotton. e cotton accounted for half the value of all American exports after 1840.

Answers

Answer:

a) the South reaped all the profits from the cotton trade.

Explanation:

Cotton grown in the southern states of the US helped to start the industrial revolution in the United Kingdom and northern states in the US. Even though cotton was not grown in northern states, the factories that processed cotton were located there. The south provided the raw materials and the north provided the final processed goods.

HELPPPPPPPPP I will give you brainliest if u r right

What does it mean to deploy a network?
A.
To set it up and implement its use
B.
To shut it down
C.
To hack into it
D.
To design it, but not do physical set up

Answers

Answer:

A

Explanation:

Answer:

AAAA

Explanation:

just did the test :))

Why do schools serve milk instead of water?

Answers

Explanation:

They serve milk because many children need the nutrition. It might seem antiquated, it began in the late 1900–1920's in public schools to provide food for impoverished kids. Some high schools offer a variety of drinks including water, but by that age kids should know better about what to consume.

Answer:

i don't know I think it's because they have water fountain and they are probably just lazy to get water or can't afford it

The hartley clinic purchased a new surgical laser for $9000. The estimated salvage value is $5000. The laser has a useful life of five years and the clinic expects to us it $10000 hours. It was used 1600 hours in year 1; 2200 hours in year 2; 2400 in year; 1800 hours in a year; 2000 hours in year 5

Answers

Answer and Explanation:

The computation is shown below:

Years          Straight line            Units of production

Year 1 ($90,000 - $5,000 ÷ 5)    1,600 × 8.5 = $13,600

                    = $17,000

Year 2              $17,000                       2200 × 8.5 = $18,700

Year 3              $17,000                       2400 × 8.5 = $20400

Year 4               $17,000                       1,800 × 8.5 = $15,300

Year 5              $17,000                        2000 × 8.5 = $17,000

Total                 $85,000                      $85,000

The 8.5 come from

= ($90,000 - $5,000) ÷ (10,000 hours)

= 8.5

hence, the units of production would be most appropriate

Pretend you are an employer. you will discuss a promotion and a raise with an employee. What will you say to them?

Answers

Answer:

Good luck with the promotion, here are some ideas for the company!

Correll Company has two divisions, A and B. Information for each division is as follows: Division A B Operating Profit $40,000 $260,000 Investment in Division $100,000 $1,200,000 Weighted Average Cost of Capital 12% 12% Profit Margin Percentage 10% 20% What is the investment turnover for Division A?

Answers

Answer:

The investment turnover for Division A is 4.

Explanation:

The computation of the investment turnover ratio for division A is shown below

Operating profit = $40,000  

Profit margin percentage = 10%

Profit margin percentage = Operating profit ÷ Net sales

10% = $40,000 ÷Net sales

Net sales = $400,000

Investment = $100,000

Now  

Investment turnover = Net sales ÷  Investment

= $400,000 ÷ $100,000

= 4.00

hence, The investment turnover for Division A is 4.

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