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Rom4ik [11]
3 years ago
5

Delaney company is considering replacing equipment which originally cost $600,000 and which has $420,000 accumulated depreciatio

n to date. a new machine will cost $790,000 and the old equipment can be sold for $8,000. what is the sunk cost in this situation?
Business
1 answer:
Charra [1.4K]3 years ago
7 0
In this case, we have to deduct the original equipment cost with the accumulated depreciation to date.
$600,000 - $420,00 = $180,000

Purchasing a new machine would cost $790,000, which can be deducted with the remaining value of the old machine plus its value once sold. To do this, we have:
$790,000 - $180,000 - $8,000 = $602,000

The sunk cost in this case is $602,000.
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After deciding to acquire a new car, you can either lease the car or purchase it with a two-year loan. The car you want costs $3
KIM [24]

Answer:

$33467.03

Explanation:

Given: we are given that $33000 is the cost of the car that’s on sale if the person wants a cash option.

             

Leasing option of $495 per month for the next two years with an immediate payment of $95 as a balloon payment for the vehicle.

The person will sell the vehicle for $21000 after 2 years from now.

We need to calculate the breakeven price to sell the vehicle after two years if the person sold the car on either option.

Therefore we will use the future value annuity formula to calculate how much would yield on the lease payments of $495 after two years first.

Fv = P [((1+r) ^n)-1)/r]

Where Fv is the future value that will yield from the payments.

P is the periodic payment which is $495 per month.

r is the interest per period so in this case it is 5%/12 as the 5% is on an annual basis and the individual will make monthly payments.

n is the number of payments made and in this case it is 24 payments because $495 is paid monthly for 2 years.

Now we insert the values on the formula above

 Fv = $495 [((1+ (5%/12) ^24)-1)/ (5%/12)]   then compute on a calculator and get the answer

Fv = $12467.03 + $95 we add $95 to the solution because the customer must pay it as a deposit if they choose the lease option.

The value the customer must sell the car for to break even for both options in two years’ time is the sum of $21000 which the customer sells the car for in two years’ time plus the above future value for the lease repayments, so $21000+ $12467.03 =$33467.03 .  

4 0
3 years ago
Abc company is hesitant about entering ukraine, because the country has been experiencing social unrest in recent years. Based o
AysviL [449]

The answer is<u> "political risk".</u>


Political risk is among the most critical hazard factors confronting international investors. In many rising and frontier markets, the political circumstance is altogether less steady than the United States with the potential for across the board extortion and defilement.  

Political risks  are those related with changes that jump out at a nation's approaches administering organizations, and additionally outside elements that could influence organizations.

7 0
2 years ago
Danny's workplace just started casual Fridays. What can Danny now wear to work on Fridays?
babunello [35]
A black suit and tie
8 0
3 years ago
g Consider the income-expenditure model. Suppose that the marginal propensity to consume is equal to 0.8. A reduction in taxes o
RideAnS [48]

Answer:

increase by 400 billion dollars

Explanation:

marginal propensity to consume = mpc

tax multiplier = -mpc/1-mpc

from our question we were given mpc to be 0.8

-0.8/1-0.8

= -0.8/0.2

= -4

change in output = -4(-100)

= 400 billion dollars

for a $100 tax decrease, output will increase by $100 billion x 4

= $400 billion

3 0
3 years ago
Bogart Company is considering two alternatives. Alternative A will have revenues of $146,100 and costs of $104,400. Alternative
irinina [24]

Answer:

Choosing alternative B would increase net income by $17,100

Explanation:

The analysis showing the incremental revenues,costs and net income of alternative A and B is shown below:

              Alternative A           Alternative   B     Difference between A&B

Revenues        $146,100            $185,900           $39800

Costs               ($104,400)           ($127,100)        ($22700 )

Net income      $41,700                 $58,800        $17,100

Alternative B records a higher net income compared to Alternative A,hence choosing alternative B would increase net income by $17,100

r

4 0
3 years ago
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