The following data pertain to an investment in equipment:
- investment in the project10,000
- Annual net cash inflows2,400
- Working capital required5,000
- salvage value of the equoiment1,000
- Life of the project 8 years
At the completion of the project, the working capital will be released for use elsewhere. Compute the net present value of the project, using a discount rate of 10%:
The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,900 direct labor-hours will be required in May. The variable overhead rate is $9.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $112,970 per month, which includes depreciation of $18,170. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be: