1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
tester [92]
3 years ago
6

A machine costing $25,000 to buy and $3000 per year to operate will save mainly labor expenses in packaging over six years. the

anticipated salvage value of the machine at the end of six yeats is $5000 (a) if a 10% return on investment (rate of return) is desired, what is the minimum required annual savings in labor from this machine
Business
1 answer:
matrenka [14]3 years ago
4 0

$3388 is the minimum required annual savings

<u>Explanation:</u>

<u>a) First we have to calculate the present value of the salvage amount: </u>

Step1: Go to excel and "click" insert to insert the function.

Step2: Select the "PV" function as we are finding the present value in this case.

Step3: Enter the values as Rate = 10%; Nper = 6; PMT = 0; FV = -5000

Step4: Click "OK" to get the desired value.

The value comes to "$2,822.37"

Now, the present value is $25,000 plus $2,822 = $27,822

<u> Calculating the annual cash inflows using excel sheet: </u>

Step1: Go to excel and click "insert" to insert the function.

Step2: Select the "PMT" function as we are finding the annaul cash inflows

Step3: Enter the values as Rate = 10%; Nper = 6; PV = -27822; FV = 0

Step4: Click "OK" to get the desired value.

The value comes to " $6,388"

Therefore, the annual cash inflows are $6,388

<u> To calculate the annual savings, we deduct the annual operating costs from annual cash inflows </u>

Annual savings = $6,388 - $3,000

= $3,388

You might be interested in
Universal Travel Inc. borrowed $500,000 on November 1, 2013, and signed a 12-month note bearing interest at 6%. Interest is paya
valentinak56 [21]

Answer:

C.$5,000.

Explanation:

November 1, 2013

Amount of Loan = $500,000

As the Interest is payable at maturity, at December 31, 2013 only one month of interest expense is accrued, which is not paid, Following Journal entry will be passed tor record the interest expense.

Dr.  Interest Expense               $2,500

Cr.  Interest Payable on Note  $2,500

Interest Expense = $500,000 x 6% x 2/12 = $5,000

6 0
3 years ago
Sheridan Company received $135000 in cash and a used computer with a fair value of $318000 from Carla Vista Co. for Sheridan Com
sammy [17]

Answer:

The gain that  Sheridan should recognize on this exchange is $135000

Explanation:

Where Exchange Transaction lacks commercial substance, the asset that is acquired is measured at the <em>Carrying Amount or Undepreciated Cost </em> of the asset given up.

The gain will then include an <em>further consideration acquired</em> on the exchange of an asset.

<u>Entries to record the exchange are as follows :</u>

Cash $135000 (debit)

New Asset at undepreciated cost $420300 (debit)

Cost of Old asset given up $420300 (credit)

Gain on exchange $135000 (credit)

Conclusion :

The gain that  Sheridan should recognize on this exchange is $135000

6 0
3 years ago
If the present value of $280 paid one year from now is $250 what is the one-year discount factor?
OleMash [197]

Answer:

12%

Explanation:

The discount rate  will be  PV/FV -1

i.e., i =  (Fv/pv )-1

i=  (280/250) - 1

i = 1.12-1

i=12%

7 0
2 years ago
Read 2 more answers
A company purchased new equipment for $48,000. The company paid cash for the equipment. Other costs associated with the equipmen
brilliants [131]

Answer:

The cost recorded will be $53,400

Explanation:

In this question, we are to give the value of the amount recorded as the cost of the new equipment.

By simply doing some additions, we will be okay.

mathematically, this would be

Cost of equipment recorded = cost of equipment + transportation cost + sales tax + installation cost = 48,00 + 1,200 + 2,500 + 1,700 = $53,400

4 0
2 years ago
By using bootstrap marketing strategies (unconventional, low-cost, creative techniques) small companies can get as much "bang" f
Marat540 [252]

Answer:

The given statement relates to bootstrap marketing strategies

Explanation:

In simple words, Bootstrap marketing relates to an advertising strategy usually used by entrepreneurs to create a business from the bottom up with little but private money and, luckily, money from the very first sale.

 This method is usually used by start ups for capturing initial market share and with the expertise of an angel investor they can really go for high goals.

8 0
3 years ago
Other questions:
  • Why is a relentless workaholic quickly overwhelmed?
    15·1 answer
  • Alex Company prepares its statement of cash flows using the direct method for operating activities. For the year ended December
    11·1 answer
  • How do communist and socialist political theories differ from each other?
    14·1 answer
  • Which of the following is responsible for decision making regarding the purchase and sale of bonds by the fed?
    11·1 answer
  • As a politician, you would be more inclined to propose an increase in the minimum wage when you believe that the new minimum wag
    14·1 answer
  • Katya is developing a business message about a green initiative that her company is hoping to launch. In the process of creating
    10·1 answer
  • QUESTION 1 When several alternative investment proposals of the same amount are being considered, the one with the largest net p
    13·1 answer
  • The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 1
    7·1 answer
  • Which answer applies to "fine print"?
    11·1 answer
  • Assume Fred faces a potential liability exposure. The standard deviation of the probability distribution for the loss equals $12
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!