HomeworkLib
Question

A software company’s labor requirements currently cost $315,000/year. The labor-hour requirements are expected to increase by...

A software company’s labor requirements currently cost $315,000/year. The labor-hour requirements are expected to increase by 12% per year over the next 5 years. If inflation is 5.0%, determine the labor costs after 5 years using:

Part a

Then-current dollars: 708511.9

Part b

Constant-worth dollars.$_______________

answer b please

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Here,

Current Cost = $315,000

Increase per year = 12%

Inflation per year =5%

So constant worth dollars value = 315000*(1+.12)^(5) = $555137.6

Current Dollar = $555137.6 * (1+.05)^(5) =$708511.9

0 0
Add a comment
Know the answer?
Add Answer to:
A software company’s labor requirements currently cost $315,000/year. The labor-hour requirements are expected to increase by...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 4. Yearly labor costs of a highway maintenance group are currently $420,000/year. If labor rates escalate...

    4. Yearly labor costs of a highway maintenance group are currently $420,000/year. If labor rates escalate at a 12% rate and general inflation increases at 9%, determine for each of the next 6 years the labor cost in then-current and constant worth dollars. (3.3) of the next be ars 129 rate and Question: In a new, highly automated factory, labor costs are expected to decrease at an annual compound rate of 5%; material costs are expected to increase at an...

  • forecast to be 5%. D! the 4 years. (3.3) Yearly labor costs of a highway maintenance...

    forecast to be 5%. D! the 4 years. (3.3) Yearly labor costs of a highway maintenance group are currently $420,000/year. If labor rates escalate at a 12% rate and general inflation increases at 9%, determine for each of the next 6 years the labor cost in then-current and constant worth dollars. (3.3) IC ou desire a real return of 8% on your money, excluding inflation, and inflation is uld you be seeking? (3.3)

  • The company is currently analyzing direct labor hour requirements for the upcoming year. Budgeted unit production...

    The company is currently analyzing direct labor hour requirements for the upcoming year. Budgeted unit production for each of the products is as follows Number of units to be produced Cutting Assembly Estimated hours per unit: Product model Regal Zip 2.2 2.3 2.8 Regal Zip . Flash .. . 560 770 880 1.1 Direct labor hour $ 14 $ 15 rint Done Osborne Industries manufactures three models of a product in a single plant with two departments: Cutting and Assembly....

  • A company’s stock price is currently $52.50. This company is expected to grow at the constant...

    A company’s stock price is currently $52.50. This company is expected to grow at the constant rate of 4% for long time. If the investors’ required return is 12% what will be this company’s price in 5 years?

  • The Atlas Corp. of the United States exports computer software to the euro zone. Sales are...

    The Atlas Corp. of the United States exports computer software to the euro zone. Sales are currently 5,000,000 units per year at the euro equivalent of $126 each. The current exchange rate is $1.1280/€ but the dollar is expected to appreciate next week by 8.64% after which it will remain unchanged for at least ten years. Accepting this forecast, Atlas Corp. faces a pricing decision in anticipation of the appreciation. It may either 1) maintain the same euro price and...

  • Dewey Corp. is expected to have an EBIT of $2,850,000 next year. Depreciation, the increase in...

    Dewey Corp. is expected to have an EBIT of $2,850,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $220,000, $125,000, and $225,000, respectively. All are expected to grow at 16 percent per year for four years. The company currently has $17,000,000 in debt and 835,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 2.8 percent indefinitely. The company’s WACC is 9.2 percent and the...

  • A company’s stock price is currently $45.50. This company is expected to grow at the constant...

    A company’s stock price is currently $45.50. This company is expected to grow at the constant rate of 4% for long time. If the investors’ required return is 12% what will be this company’s price in 5 years? 43.19 46.84 59.01 63.87 55.36

  • 5. Microsoft currently pays a dividend of $2.30. The company’s goal is to increase dividends by...

    5. Microsoft currently pays a dividend of $2.30. The company’s goal is to increase dividends by 4% each year. You, the investor, require a rate of return of 12%. 5a. What is the current price you would pay now for a share in Microsoft? 5b. What will Microsoft’s dividend be in five years? What about six years? 5c. What will the price of a share in Microsoft be in five years?

  • Dewey Corp. is expected to have an EBIT of $3,450,000 next year. Depreciation, the increase in...

    Dewey Corp. is expected to have an EBIT of $3,450,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $280,000, $185,000, and $285,000, respectively. All are expected to grow at 17 percent per year for four years. The company currently has $23,000,000 in debt and 895,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 2.9 percent indefinitely. The company’s WACC is 9.3 percent and the...

  • Dewey Corp. is expected to have an EBIT of $3,150,000 next year. Depreciation, the increase in...

    Dewey Corp. is expected to have an EBIT of $3,150,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $250,000, $155,000, and $255,000, respectively. All are expected to grow at 16 percent per year for four years. The company currently has $20,000,000 in debt and 865,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.5 percent indefinitely. The company’s WACC is 8.6 percent and the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT