Acc/504 Week 4
U1-40 (30 min) Benefit-cost analysis—add a project
a. and b. | Income Statement | New contract changes | Dollar impact of new contract | Income with new contract | Sales revenue | $ 1,500,000 | $ 200,000 | $ 200,000 | $ 1,700,000 | Costs | | | | | Labor | 700,000 | 175,000 | 175,000 | 875,000 | Equipment lease | 104,000 | 12% | 12,480 | 116,480 | Rent | 120,000 | - | - | 120,000 | Supplies | 60,000 | 15% | 9,000 | 69,000 | Officers' salaries | 400,000 | - | - | 400,000 | Other costs | 50,000 | 15% | 7,500 | 57,500 | Total costs | 1,434,000 | | 203,980 | 1,637,980 | Operating profit (loss) | $ 66,000 | | $ (3,980) | $ 62,020 | Technically, the new contract reduces profit of the company by $3,980. By itself, this one-year contract appears not to be worth the effort of hiring and training new, part-time consultants.
c. Other considerations include (1) whether this will …show more content…
The cited article about Grand Coulee Dam in Washington State is very interesting reading. Benefits and costs have not been borne by the same entities or individuals. Currently some of the adversely affected groups (e.g., Native Americans and sport and commercial fishermen) are working toward reparations of past damages. The impacts on businesses and farms in the region could be immense. The World Bank has been a frequent supporter of these projects, but has been criticized for focusing on benefits while ignoring
a. and b. | Income Statement | New contract changes | Dollar impact of new contract | Income with new contract | Sales revenue | $ 1,500,000 | $ 200,000 | $ 200,000 | $ 1,700,000 | Costs | | | | | Labor | 700,000 | 175,000 | 175,000 | 875,000 | Equipment lease | 104,000 | 12% | 12,480 | 116,480 | Rent | 120,000 | - | - | 120,000 | Supplies | 60,000 | 15% | 9,000 | 69,000 | Officers' salaries | 400,000 | - | - | 400,000 | Other costs | 50,000 | 15% | 7,500 | 57,500 | Total costs | 1,434,000 | | 203,980 | 1,637,980 | Operating profit (loss) | $ 66,000 | | $ (3,980) | $ 62,020 | Technically, the new contract reduces profit of the company by $3,980. By itself, this one-year contract appears not to be worth the effort of hiring and training new, part-time consultants.
c. Other considerations include (1) whether this will …show more content…
The cited article about Grand Coulee Dam in Washington State is very interesting reading. Benefits and costs have not been borne by the same entities or individuals. Currently some of the adversely affected groups (e.g., Native Americans and sport and commercial fishermen) are working toward reparations of past damages. The impacts on businesses and farms in the region could be immense. The World Bank has been a frequent supporter of these projects, but has been criticized for focusing on benefits while ignoring