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Firlakuza [10]
2 years ago
14

The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $27,000,

would be replaced by a new machine. The new machine would be purchased for $432,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $149,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.):
Business
2 answers:
Gelneren [198K]2 years ago
7 0

Answer:

17.82%

Explanation:

As we know that:

Simple Rate Of Return = Net Operating Income / Initial Investment

Here

Initial Investment is $432,000

Net Operating Income = Annual Cost Savings - Annual Depreciation

Here

Annual Cost Savings are $149,000

Annual Depreciation =  $432,000/6 = $72,000

By putting values, we have:

Net Operating Income = $149,000 - $72,000 = $77,000

Now by putting values in the above bold equation:

Net Operating Income = $77,000 / 432,000 = 17.82%

Elena-2011 [213]2 years ago
4 0

Answer: 19.01%

Explanation:

The simple rate of return is the Income that came from an investment divided by the cost of the investment.

It is therefore expressed by;

Simple rate of return = Net Income / Initial investment

Initial investment

= Price of new machine - salvage value of old machine

= 432,000 - 27,000

= $405,000

Net Income

= Income - depreciation of new machine

= 149,000 - (432,000/6)

= $77,000

Simple rate of return

= 77,000/405,000

= 19.01%

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The predetermined overhead rate for manufacturing overhead for 2020 is $4.00 per direct labor hour. Employees are expected to ea
timofeeve [1]

Answer:

$60,000

Explanation:

The computation of the estimated manufacturing overhead is shown below:

Estimated manufacturing overhead = Direct labor hours × predetermined overhead rate

where,

Direct labor hours = Total Direct labor cost ÷ Cost per hour

                              = ($100,000 × 75%) ÷ ($5)

                              = 15,000 direct labor hours

Now the estimated manufacturing overhead equal to

= 15,000 direct labor hours × $4

= $60,000

3 0
3 years ago
An individual buys stock at $40 per share. Many years later, the individual dies when the market value is $60. The estate distri
marissa [1.9K]

Answer:

$60

Explanation:

An individual buys stock at $40 per share. Many years later, the individual dies when the market value is $60. The estate distributes the shares to a beneficiary when the stock is worth $70. Therefore the cost basis to the beneficiary is

The cost basis by definition is usually equal to the fair market value of the property or asset at the time of the decedent's death or when the actual transfer of assets was made.

However for the purpose to be served to reduce the tax due on the inheritance, we have chosen to opt for the fair market value of the property or asset at the time of the decedent's death which is $60

3 0
3 years ago
Joe and karina depend on both of their salaries to afford their mortgage. karina recently lost her job and they are worried that
WINSTONCH [101]

Answer:

The Communication Privacy Management Theory

Explanation:

The Communication Privacy Management Theory studies the ways that people think about and make decisions surrounding how to reveal or hide private information.

7 0
3 years ago
Which of the following promotion mix approaches involves a producer promoting a product to different channel members who in turn
bulgar [2K]

Answer:

Push strategy

Explanation:

A Push strategy is originated from the push and pull concept in the logistics. This strategy refers to the concept of producers pushing their products into different channels and then those channels will further market and advertise their products. This strategy is one of the various channel strategies that is used by producers.

One of the example would be Walmart which uses push strategy over pull.

I hope the answer is helpful. Thanks for asking.

6 0
2 years ago
RJ Miller Manufacturing Company produces a product that sells for $120. A selling commission of 10% of the selling price is paid
djverab [1.8K]

Answer:

$48

Explanation:

Contribution = Sales - Variable Costs

where,

Sales = $120

Variable Costs = $120 x 10% + $60 = $72

therefore,

Contribution = $120 - $72 = $48

The contribution margin per unit is: $48

6 0
2 years ago
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