Hillsong inc. manufactures snowsuits. hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. its existing machine was purchased five years ago at a price of $1.8 million; six months ago, hillsong spent $55,000 to keep it operational. the existing sewing machine can be sold today for $250,000. the new sewing machine would require a one-time, $85,000 training cost. operating costs would decrease by the following amounts for years 1 to 7:

year 1 $390,000
2 400,000
3 411,000
4 426,000
5 434,000
6 435,000
7 436,000
the new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. the salvage value is expected to be $400,000. this new equipment would require maintenance costs of $100,000 at the end of the fifth year. the cost of capital is 9%.

instructions

use the net present value method to determine whether hillsong should purchase the new machine to replace the existing machine, and state the reason for your conclusion.

Paar corporation bought 100 percent of kimmel, inc., on january 1, 2012. on that date, paar’s equipment (10-year life) has a book value of $420,000 but a fair value of $520,000. kimmel has equipment (10-year life) with a book value of $272,000 but a fair value of $400,000. paar uses the equity method to record its investment in kimmel. on december 31, 2014, paar has equipment with a book value of $294,000 but a fair value of $445,200. kimmel has equipment with a book value of $190,400 but a fair value of $357,000. the consolidated balance for the equipment account as of december 31, 2014 is $574,000. what would be the impact on consolidated balance for the equipment account as of december 31, 2014 if the parent had applied the initial value method rather than the equity method? the balance in the consolidated equipment account cannot be determined for the initial value method using the information given. the consolidated equipment account would have a higher reported balance. the consolidated equipment account would have a lower reported balance. no effect: the method the parent uses is for internal reporting purposes only and has no impact on consolidated totals.

In each of the following cases, find the unknown variable. ignore taxes. (do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) accounting unit price unit variable cost fixed costs depreciation break-even 20,500 $ 44 $ 24 $ 275,000 $ 133,500 44 4,400,000 940,000 8,000 75 320,000 80,000

Gwen, a manager at exude apparels inc., received a message from a customer requesting a replacement for a purchased pair of shoes. exude apparels has a clearly stated no-return policy. gwen responded to the customer denying the request in a tactful and clear manner. despite this, the customer submitted a second request. in this scenario, which of the following is an appropriate response to the second request?