Categories

ACCT 386 - Week 7 - Homework - Question 7

ACCT 386 - Week 7 - Homework - Question 7
Price: $4.99
This Tutorial contains following Attachments
  • ACCT 386 - Week 7 - Homework - Question 7.doc
Qty:     - OR -   Add to Wish List

ACCT 386 - Week 7 - Homework - Question 7

There may be chances that the figures given in our question and your question doesn't matches. Don't worry, we are here to help you. Just write to us at studentwhiz@gmail.com and your answer is with you in no time.

Question 7

Nagoya Amusements Corporation places electronic games and other amusement devices in supermarkets and similar outlets throughout Japan. Nagoya Amusements is investigating the purchase of a new electronic game called Mystic Invaders. The manufacturer will sell 20 games to Nagoya Amusements for a total price of ¥166,000. (The Japanese currency is the yen, which is denoted by the symbol ¥.) Nagoya Amusements has determined the following additional information about the game:

a.

The game would have a 5-year useful life and a negligible salvage value. The company uses straight-line depreciation.

b.

The game would replace other games that are unpopular and generating little revenue. These other games would be sold for a total of ¥23,000.

c.

Nagoya Amusements estimates that Mystic Invaders would generate annual incremental revenues of ¥209,000 (total for all 20 games). Annual incremental out-of-pocket costs would be (in total): maintenance, ¥44,000; and insurance, ¥8,000. In addition, Nagoya Amusements would have to pay a commission of 48% of total revenues to the supermarkets and other outlets in which the games were placed. (Ignore income taxes.)