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givi [52]
4 years ago
9

Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the period ends, those assets are expec

ted to have an after-tax salvage value of $45,000.
How is the $45,000 salvage value handled when computing the net present value of the project?

a) reduction in the cash outflow at time zero
b) cash inflow in the final year of the project
c) cash inflow for the year following the final year of the project
d) cash inflow prorated over the life of the project
e) not included in the net present value
Business
1 answer:
stealth61 [152]4 years ago
8 0

Answer:

b) cash inflow in the final year of the project

Explanation:

Aftertax salvage value is the net proceeds from the sale or disposal of fixed assets like Plant and Equipment (PPE) at the end of the project. The amount of money received is an income and therefore, tax must be paid on it and the company keeps the rest.

The after tax salvage value of a fixed asset used in a project , is included in the NPV calculation . It is a terminal cashflow and is part of the project since the assets being sold are used in production of the items that Rossiter Restaurants sell. However, it is important to note that you will use the PV of the after tax salvage value with the PV of other cash inflows and initial investment amount to find the NPV of the project.

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gregori [183]

Answer:

1. Bond issue at 97.25

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b. Amount of interest payment =  8%*$500,000* 1/2 =  $20,000

c. total Interest payment  =  $20,000 *2*20 = $800,000

d. Total amount repaid at maturity = $500,000

2. Bond issue at 102.5

a. cash received  =  102.5%*$500,000 = $512,500

b. Amount of interst payment = 8%*$500,00 * 1/2  = $20,000

c. Total amount of interest payment = $20,000*2*20 = $800,000

d. Total amoun repaid at matrurity = $500,000

Explanation:

7 0
3 years ago
which type of services offer tangible components along with the service component? which type of services offer tangible compone
lukranit [14]

The offer tangible components along with the service component is end product services. The correct option is (a).

<h3>What do you mean by the end product services?</h3>

End product services are those that provide tangible components in addition to the service component. For instance, in restaurants, there is food and a dining service.

A service business is one in which the buyer's perception of the value of the offering is mostly based on the services rendered to him rather than the products made available. All intangible services offered to the customer fall under this category.

Pure Services: Services that provide clients with extremely few or no tangible products, such as consulting, storage, training/education, etc.

Therefore, the offer tangible components along with the service component is end product services.

To know more about the end product services, visit:

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7 0
1 year ago
In business, intellectual property (IP) is a term applied broadly to any company information that is thought to bring an advanta
Anuta_ua [19.1K]

Answer:

HR policies and employment agreements about IP may or may not be enforceable, depending on current law and location.

Explanation:

The HR department of a company may have specific policies regarding intellectual property, but these policies do not necessarily have a legal backing in all cases, or in some specific cases.

This is because internal rules inside an organization are not a source of law, and only have validity inside the organization because the employees commit themselves to follow them when they sign a contract. After the contract ends, the legalitity of the specific organizational policies is dubious.

7 0
3 years ago
The rate of return on a savings account is also referred to as
Bad White [126]

Answer: Yield

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8 0
3 years ago
Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A physical count of the supplies sho
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Answer:

c. Debit Office Supplies Expense $254 and credit Office Supplies $254.

Explanation:

The adjusting entry is as follows

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(Being supplies account is adjusted)  

The supplies expense is computed by  

= Debit balance of office supplies - unused supplies available

= $359 - $105

= $254

The $254 is to be reported as an office supplies expense.

7 0
4 years ago
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