Ac505 Project B

Clark Paints Data: be of new equipment $200,000 Expected life level of equipment in twelvemonths5 divisions Disposal value in 5 years $40,000 Life ware - number of cans $5,500,000 one-year production or leveraging needs $1,100,000 Number of workers unavoidable3 yearbook hours to be worked per employee2000 hours Earnings per hour for employees $12.00 yearly health benefits per employee $2,500 early(a) annual benefits per employee-% of wages18% moderate of raw materials per can $0.25 former(a) variable production dally per can $0.05 Costs to get cans - per can $0.

45 postulate rove of return12% impose rate35% Cost to produceMakingPurchasing annual speak to to purchase cans $495,000 Annual cost of direct material: Need of 1,100,000 cans per year $275,000 Annual variable production costs per can Other variable production costs per can $55,000 Annual cost of direct labor for new employees: Payroll for the three employees $72,000 Annual health benefits $7,500 Other annual benefits $12,960 hail wages and benefits $92,460 hail annual production costs $422,460 $495,000 $(72,540) Annual silver redeeming(a) earlier Tax $72,540 Annual depreciation = (200000 - 40000) / 5 $32,000 Tax nest egg due to depreciation $11,200 Cash flows over the life of the take in Before TaxTax Effectafter Tax ItemAmount Amount Annual cash nest egg (make vs. buy) $72,540 0.65 $47,151 Tax savings due to depreciation...If you want to germinate a full essay, order it on our website: Orde rCustomPaper.com

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