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2 years ago

The discounted payback period Blank _____ account for the time value of money, and the payback period Blank

Business

1 answer:

kondor19780726 [428]2 years ago

8 0

The discounted payback period does account for the time value of money, and the payback period does not.

<h3>What is discounted payback period?</h3>

A method of capital budgeting used for determining a project's profitability is known as discounted payback period. This will be done by recognizing the time value of money and by discounting cash flows of the future.

The payback period is the amount of time it takes for an asset's net cash flows to pay back the amount invested in it. It's a quick and easy technique to assess the risk of a given project.

The advantage of this method is utilized in selecting the projects as this method helps to determine the profitability of any project by identifying measures to reach the break-even point in any project.

Learn more about discounted payback, here

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Identify the internal control weakness in the following situations. State how the person can hurt the company.

Degger [83]

Answer:

Identification of the Internal Control Weaknesses:

A. There is no segregation of duties and there is lack of access control. Jerry Miller as a security guard is not expected to have a master key to the cash box. With this he can pilfer the cash. If he prepares the report that shows the number of cars that parked on the lot, he is not supposed to also prepare the day's cash receipts. Otherwise, he can state any number of cars as parked that he likes, and which corresponds to the cash he might leave in the Cash box since he also has a master key.

B. There is no segregation of duties and there is lack of supervision, proper reconciliations, and assets audit. Sharon Fisher handles purchase transactions from the beginning to the close all alone with a third party. This exposes the company to procurement frauds and collusion with suppliers. She can purchase assets for the company at prices that would enrich her personally.

C. Forming an audit opinion on the basis of ratio analysis of last year's comparative financial statements exposes the company to audit risks. While ratio analysis is part of the basis for forming audit opinions, it is surely not the first audit procedure to obtain audit evidence to support his audit opinion on the financial statements. An auditor is expected to obtain sufficient audit evidence and perform audit substantive tests of financial statement assertions. He or she is also expected to review the internal control system to ensure that it is operating effectively after establishing its existence and reviewing changes in internal controls.

Explanation:

Internal Controls are controls established by management in order to help it achieve business goals. There are many internal controls, including Separation of Duties, Access Controls , Authorization and Approvals, Asset Audits, Reconciliations, and Data Backups. The purposes of internal controls are to establish the reliability of financial reporting, ensure timely feedback on the achievement of operational or strategic goals, and achieve compliance with financial management laws, and accounting regulations.

4 0

3 years ago

On July 1, 2019, Pharoah Company purchased new equipment for $80,000. Its estimated useful life was 8 years with a $16,000 salva

Fantom [35]

Answer:

journal entry to record depreciation on December 31, 2019 is

Debit Depreciation $8,000

Credit Accumulated Depreciation $8,000

journal entry to record depreciation on December 31, 2022.

Debit Depreciation $5,000

Credit Accumulated Depreciation $5,000

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset

Mathematically,

Depreciation = (Cost - Salvage value)/Estimated useful life

Annual depreciation = (80000 - 16000)/8

= $8,000

Between July 1, 2019 and January 1 , 2022 is 2.5 years

Carrying amount of asset = $80,000 - 2.5($8,000)

= $60,000

If the company estimated the remaining useful life to be 10 years beyond December 31, 2022 and the salvage value is estimated to be $5,000, then

Depreciation = ($60,000 - $5,000)/11

= $5,000

8 0

4 years ago

Read 2 more answers

Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $217,200 of raw materials on credit

sukhopar [10]

Answer:

The cost of product transferred to Finished Goods Inventory is $450,100

Explanation:

The computation of the cost of the product transferred to Finished Goods Inventory is shown below:

= Beginning Work in Process Inventory + direct material + direct factory payroll + overhead cost - Ending Work in Process Inventory

where,

Direct material = Total material - indirect material

= $211,000 - $34,800

= $176,200

Direct factory payroll = Total factory payroll - indirect labor

= $159,600 - $44,800

= $114,800

Overhead cost = 150% of direct labor cost

= 150% × $114,800

= $172,200

The other items values would remain the same

Now put these values to the above formula

So, the value would equal to

= $17,100 + $176,200 + $114,800 + $172,200 - $30,200

= $450,100

7 0

3 years ago

Biochemical Corp. requires $720,000 in financing over the next three years. The firm can borrow the funds for three years at 10.

Brrunno [24]

Answer:

Long-term fixed-rate plan-$220,320.00

Short-term variable-rate plan-$224,280.00

The long-term fixed-rate plan is less costly as it has a lower interest expense

Explanation:

Total interest under the first plan=principal amount*interest rate*3 years

principal amount is $720,000

interest rate is 10.20%

total interest expense=$720,000*10.20%*3=$220,320.00

Interest expense under second plan=($720,000*8.50%)+($720,000*12.90%)+($720,000*9.75%)=$224,280.00

6 0

3 years ago

George Kaplan is considering adding a new crop-dusting plane to his fleet at North Corn Corner, Inc. The new plane will cost $85

Yuri [45]

Answer:

The correct answer is $105,000.

Explanation:

According to the scenario, the given data are as follows:

Cost of the plane = $85,000

Modification cost = $20,000

So, we can calculate the net cost of the plane by using following formula:

Net cost of the Plane = Cost of the plane + Modification cost

By putting the value, we get

Net cost of the plane = $85,000 + $20,000

= $105,000

7 0

3 years ago