Determine the project\'s accounting rate of return. (Round your answer to 2 deci

Question

Determine the project's accounting rate of return. (Round your answer to 2 decimal places.

Determine the project's payback period. (Round your answer to 2 decimal places.)

Using a discount rate of 15 percent, calculate the net present value (NPV) of the proposed investment. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollar. Round the final answer to nearest whole dollars.)

Recalculate the NPV using a 10% discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollar. Round the final answer to nearest whole dollars.)

please explain detaily.

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PA11-2 Part 1 Required 1-a. Complete the following table showing the totals. (Enter all answers in whole dollars.) Current (no automation) Proposed (automation) uction and Sales Volume S 88,000 Units S130,000 Units Per Unit Total Per Unit Total Sales Revenue 91 S 8,008,000S 91$11,830,000 Variable Costs Direct Materials 17 17 Direct Labor 25 20 Variable Manufacturing Overhead Total Variable Manufacturing Costs Contribution Margin Fixed Manufacturing Costs Net Operating Income 51 46 S 403,520,000 S1,160,000 S 2,360,000 455,850,000 2,170,000 S 3,680,000

Explanation / Answer

1A) (AMOUNT IN $) CURRENT (NO AUTOMATION) PROPOSED ( AUTOMATION) SALES AND PRODUCTION VOLUME 88000 UNITS 130000 UNITS PER UNIT TOTAL PER UNIT TOTAL SALES REVENUE 91 8008000 91 11830000 (S.P PER UNIT * SALES VOLUME) LESS: VARIABLE COSTS: DIRECT MATERIALS 17 1496000 17 2210000 (VARIABLE COST PER UNIT * PRODUCTION VOLUME) DIRECT LABOUR 25 2200000 20 2600000 (VARIABLE COST PER UNIT * PRODUCTION VOLUME) VARIABLE MANUFACTURING OVERHEADS 9 792000 9 1170000 (VARIABLE COST PER UNIT * PRODUCTION VOLUME) TOTAL VARIABLE MANUFACTURING COSTS 51 4488000 46 5980000 CONTRIBUTION MARGIN 40 3520000 45 5850000 FIXED MANUFACTURING COSTS -1160000 -2170000 NET OPERATING INCOME 2360000 3680000 ACCOUNTING RATE OF RETURN AVERAGE ACCOUNTING PROFIT AVERAGE INVESTMENT SINCE INVESTMENT DETAILS NOT MENTIONED , UNABLE TO CALCULATE ALL THE FORMULAS

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