The accounting rate of return for this investment given its income, cost of the machine and the salvage value is 8.05%.
<h3>What is the accounting rate of return?</h3>
The accounting rate of return is a capital budgeting method used to determine the level of profitabiliy of an investement.
Accounting rate of return = Average net income / Average book value
Average book value = (cost of equipment - salvage value) / 2
Average book value = (59700 - 7500) / 2 = $21,600
Accounting rate of return = $2100 / 21600 = 8.05%
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Answer:
Inventory $200,000
Cash $50,000
Notes payable $150,000
Explanation:
Data provided in the question:
Cost of the inventory purchased = $200,000
Amount paid in cash = one-fourth
= one-fourth of $200,000
= $50,000
For the remaining balance signed a note i.e = $200,000 - $50,000
= $150,000
Now,
This transaction will be recorded as:
Inventory $200,000
Cash $50,000
Notes payable $150,000
Answer:
the required rate of return is 10.20%
Explanation:
The computation of the required rate of return is shown below;
We know that
= risk free rate of return + beta × (market rate of return - risk free rate of return)
= 2.85% + 0.85 × (11.50% - 2.85%)
= 2.85% + 7.3525%
= 10.20%
hence, the required rate of return is 10.20%
Answer:
The incorrect statement regarding relevant costs and revenues:
To be relevant, a cost or revenue must not be future-oriented and must differ between the alternatives.
Explanation:
For a cost or revenue to be considered as relevant, it must be incurred or earned at a future time. It must also differ between the options available for decision making. A cost or revenue cash flow is relevant if it arises from a management decision and can be avoided. This simply means that if the cost or revenue is not affected by management decision or does not make any difference in decisions, it is not relevant.
Answer:
The correct answer is: conventional.
Explanation:
Conventional moral development is the stage in which individuals accept moral laws conceived by society or by entities who rule them. At this stage, even if there is a reason for not following those regulations, individuals opt for keeping a sense of morality in the situation and stand for those rules.
