# Swot Analysis of Mercury Drug Store

Questions ON PROBLEM 1 a. Determine the diminution associated with the odd equipment, as polite as the unused diminution on the antiquated equipment. b. Determine the money inflows (succeeding diminution and taxes) associated with the odd equipment. c. Determine the money outflows associated with the equipment. Likeness each of the items that would likeness in the T-account. Then likeness twain the money inflows and money outflows in the T-account. d. Determine (1) the allure bestow prize, (2) the profitability apostacy, (3) the inner scpristine of produce, and (4) the payback conclusion of the designed device. DEPRECIATION USING MACRS TABLE (NEW EQUIPMENT) ST YR 75,000. 00 X 33. 33% = 24,997. 50 2ND Yr 75,000. 00 x 44. 45% = 33,3337. 50 3rd Yr. 75,000. 00 x 14. 81 % = 11,107. 50 4th yr 75,000. 00 x 7. 41 % = 5,557. 50 DEPRECIATION USING MACRS TABLE (NEW EQUIPMENT) 1ST YR 50,000. 00 X 33. 33% = 16,665 2ND Yr 50,000. 00 x 44. 45% = 22,225. 00 3rd Yr. 50,000. 00 x 14. 81 % = 7,405. 00 4th yr 50,000. 00 x 7. 41 % = 3,705. 00 16,665. 00 + 22,225. 00 + 7,405. 00 = 46,295. 00 16,665. 00 + 22,225. 00 + 7,405. 00 = 46,295. 00 50,000. 00 – 46,495 = 3,705. 00 Unused Diminution on antiquated equipment
CASH INFLOWS/CASH OUTFLOWS FOR NEW EQUIPMENT 1ST YEAR TOTAL SAVINGS 30,000. 00 Less: Diminution Expense 24,997. 50 Freight Expense 5,000. 00 Working Capital 3,000. 00 32,997. 50 Income antecedently Tax ( 2,992. 500 ) VVVVVVVVVVVV 2nd YEAR TOTAL SAVINGS 30,000. 0 Less: Diminution Expense 33,337. 50 Working Capital (30,000 x 12%) 3,600. 00 36,937. 50 Income antecedently Tax ( 6,937. 50) Vvvvvvvvvvv 3rd YEAR TOTAL SAVINGS 30,000. 00 Less: Diminution Expense 11,107. 50 Working Capital (30,000 x 12%) 3,600. 0 14,707. 50 Income antecedently Tax 15,292. 50 Income Tax (15,292. 50 x 30%) 4,587. 50 NET INCOME 10,705. 00 VVVVVVVVV 4TH YEAR TOTAL SAVINGS 20,000. 0 Less: Diminution Expense 5,557. 50 Working Capital (20,000 x 12%) 2,400. 00 7,957. 50 Income antecedently Tax 12,042. 50 Income Tax (12,042. 50 x 30%) 3,612. 75 NET INCOME 8,429. 5 VVVVVVVVV C A S H FLOW _____________________________________ CASH IN : CASH OUT 30,000. 00 : 75,000. 00 30,000. 00 : 5,000. 00 30,000. 00 : 3,000. 00 20,000. 0 : 3,600. 00 : 3,600. 00 : 4,587. 50 : 3,612. 75 Totals 110,000. 00 : 98,400. 25 Vvvvvvvvvv vv vvv vvv NET PRESENT VALUE: P 1,500. 00 SINCE MACHINE IS FULLY DEPRECIATED PROFITABILITY INDEX/INTERNAL RATE OF RETURN 1ST YEAR – NONE ND YEAR – NONE 3RD YEAR – 10,705. 00 / 30,000. 00 = 36% 4TH YEAR – 8429. 75 / 20,000. 00 = 42% Payback conclusion starts on the 3RD YEAR….. QUESTIONS ON PROBLEM 2 a. Determine the diminution associated with the odd equipment, as polite as the unused diminution on the antiquated equipment. b. Determine the money inflows (succeeding diminution and taxes) associated with the odd equipment. c. Determine the money outflows associated with the equipment. Likeness each of the items that would likeness in the T-account. Then likeness twain the money inflows and money outflows in the T-account. d.
Determine (1) the allure bestow prize, (2) the profitability apostacy, (3) the inner scpristine of produce, and (4) the payback conclusion of the designed device. DEPRECIATION USING MACRS TABLE (NEW COMPUTER) 1ST YR 83,000. 00 X 20% = 16,600. 00 2ND Yr 83,000. 00 x 32% = 26,560. 00 3rd Yr. 83,000. 00 x 19. 20 % = 15,936. 00 4th yr 83,000. 00 x 11. 52 % = 9,561. 60 5TH YEAR 83,000. 00 X 11. 52% = 9,561. 60 6TH YEAR 83,000 X 5. 76% = 4,780. 80 TOTAL P 83,000. 00 DEPRECIATION USING MACRS TABLE (OLD COMPUTER) 1ST YR 97,000. 00 X 20% = 19,400. 00 2ND Yr 97,000. 00 x 32% = 31,040. 0 3rd Yr. 97,000. 00 x 19. 20 % = 18,624. 00 4th yr 97,000. 00 x 11. 52 % = 11,174. 40 5TH YEAR 97,000. 00 X 11. 52% = 11,174. 40 6TH YEAR 97,000 X 5. 76% = 5,587. 20 TOTAL P 97,000. 00 UNUSED DEPRECIATION OF OLD COMPUTER IS 5,587. 50 CASH INFLOWS/CASH OUTFLOWS FOR NEW EQUIPMENT 1ST YEAR TOTAL SAVINGS 20,000. 00 Less: Diminution Expense 16,600 Electrical Wirings 2,300. 0 Working Capital 3,500. 00 22,400. 00 Income antecedently Tax ( 2,400,00 ) VVVVVVVVVVVV 2nd YEAR TOTAL SAVINGS 20,000. 00 Less: Diminution Expense 26,560. 0 Working Capital (20,000 x 14%) 2800. 00 29. 360. 50 Income antecedently Tax ( 9,360. 50) Vvvvvvvvvvv 3RD YEAR TOTAL SAVINGS 20,000. 00 Less: Diminution Expense 15,936. 00 Working Capital (20,000 x 14%) 2800. 00 18,736. 0 Income antecedently Tax 1,264. 00 Income Tax (1,264. 00 x 35%) 442. 40 NET INCOME 821. 60 VVVVVVVV 4thYEAR TOTAL SAVINGS 20,000. 00 Less: Diminution Expense 9,561. 0 Working Capital (20,000 x 14%) 2800. 00 12,361. 60 Income antecedently Tax 7,638. 40 Income Tax (7638. 40 x 35%) 2,673. 44 NET INCOME 4,964. 96 VVVVVVVV thYEAR TOTAL SAVINGS 20,000. 00 Less: Diminution Expense 9,561. 60 Working Capital (20,000 x 14%) 2800. 00 12,361. 60 Income antecedently Tax 7,638. 40 Income Tax (7638. 40 x 35%) 2,673. 44 4,964. 96 vvvvvvvvv thYEAR TOTAL SAVINGS 20,000. 00 Less: Diminution Expense 4,780. 80 Working Capital (20,000 x 14%) 2800. 00 7,580. 80 Income antecedently Tax 12,419. 20 Income Tax (12419. 20x 35%) 4,346. 72 NET INCOME 8,072. 48 Vvvvvvvv

C A S H FLOW _____________________________________ CASH IN : CASH OUT 20,000. 00 : 83,000. 00 20,000. 00 : 2,300. 00 20,000. 00 : 3,500. 00 20,000. 00 : 2,800. 00 20,000. 0 : 2,800. 00 20,000. 00 : 442. 40 : 2,800. 00 : 2,673. 44 : 2,800. 00 : 2,673. 44 : 2,800. 00 : 4,346. 2 Totals 120,000. 00 : 112,936. 00 Vvvvvvvvvv vv vvv vvv NET PRESENT VALUE: P 4,500. 00 SINCE MACHINE IS FULLY DEPRECIATED PROFITABILITY INDEX/INTERNAL RATE OF RETURN 1ST YEAR – NONE 2ND YEAR – NONE 3RD YEAR – 821. 60 / 20,000. 00 = 4% 4TH YEAR – 4964. 96 / 20,000 = 25% 5TH YEAR – 4964. 96 / 20,000 = 25% 6TH YEAR – 8072. 48 / 20,000 = 40% Payback conclusion starts on the 3RD YEAR….. Enmar (NICO) P. Matuguinas BSBA_Marketing Management 3rd

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