centre manager has control over revenue‚ expenses and the amount invested in the current assets. The following are the techniques used to measure the divisional performance of cost centre and profit centre * Variance analysis * Profit * Return on investment * Market share COST PER UNIT: Cost refers to the total cost incurred for the production. So cost per unit refers to the cost incurred for producing 1 unit. Normally we used the below formula to calculate the cost per unit Cost/unit
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BSAD 526 Managerial Accounting Case 8-35 Introduction Wyndham Stores operates a regional chain of upscale department stores. They plan to open another store in a prosperous and growing suburban area. The company’s Vice President of Marketing is in favor of buying the new building site and building a new building on the property. The projected cost for the new building is $14 million‚ according to the vice president of marketing. The problem with the vice president’s
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With a loan If Virginia makes use of a bank loan‚ taking into account the $2million in hand and the present value of her future 3 million‚ she will be able to spend a maximum of $4.83 million. PV of $3 million is $2.83Million PV. Assuming interest rates are constant for all entities‚ including the bank‚ within one year’s time‚ 6% will have accrued and Virginia can repay the loan to the bank at $3 million. 1c. How much can Virginia spend one year from now? Future Buying Power Future Value Future
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Future Cash flows – [Principle(1+0.06)] = $4‚400‚000 – [$2‚800‚000(1.06)] = $4‚400‚000 - $2‚968‚000 = $1‚432‚000 PV = $1‚432‚000/1.06 = $1‚350‚943 Assuming that Virginia can borrow the balance of the $3 million investment at a 6% interest rate‚ she should make the investment regardless. 4. PV of investment with $3m borrowed FV = Restaurant Future Cash flows – [Principle(1+0.06)] = $4‚400‚000 – [$3‚000‚000(1.06)] = $4‚400‚000 - $3‚180‚000 = $1‚220‚000 = $1‚220‚000/1.06 PV
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be consistent with the year. 7. Given the shortcomings of the IRR methodology‚ it still proves to be an accurate method to use in evaluating the project alternatives facing IEI. It measures the benefits or returns relative to the amount invested and does not give a fixed dollar amount of return‚ unlike NPV which is prone to error. IRR also discounts the cash flows unlike the undiscounted payback period. IRR also proves to be accurate because accdg. To this method‚ among the investment alternatives
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that one would rather have X number of dollars now‚ than later. If the money is taken later a value of X+i is preferred. This concept is applied to all situations where someone uses the monies of another for some duration of time and is expected to return the money. This is used in loans‚ savings accounts‚ investments‚ annuities‚ etc... I apply the time value of money in my personal life in many ways. I calculated out a couple payment options for the new vehicle I purchased this year to see which
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company employees • Motivating employees to participate in the program • Keeping management excited about the company’s obesity prevention efforts • Discussing potential program components and deciding what activities to include “With high obesity rates in the United States‚ these health care costs can directly affect employer profits.4 It is estimated that employers spend $13 billion annually on the total cost of obesity.3 Approximately 9.1% of all health care costs in the United States are related
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ACC 202 FINAL EXAM TOPIC LIST SPRING 2013 50 questions at 6 points a question Chapter 10 (8 questions) Direct materials price and quantity variances. Understand calculations and meaning. Direct labor efficiency and rate variances. Understand calculations and meaning. Chapter 11 (9 questions) Compute ROI and show how changes in sales‚ expenses and assets impact ROI. Compute residual income and understand its strengths and weaknesses Chapter 12 (9 questions) Identify
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Products Integrative Problem Caladonia is looking to invest in projects that will yield a high rate of return to the company. They are relying on a fairly new employee to research and report adequate analysis on which direction the company should go in. Learning Team B will use the provided company data to aid the new employee in this venture and to determine the payback periods‚ the internal rate of return‚ and to decide which project will be the most beneficial project for the company to invest in
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