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suter [353]
3 years ago
10

Deep South Sounds would like to spend $189,000 for new sound equipment. However, the company has a major loan maturing 3 years f

rom today and needs this money at that time to avoid bankruptcy. The sound equipment is expected to increase the cash flows by $45,000 in the first year, $92,400 in the second year, and $40,000 a year for the following 3 years. Should Deep South buy the sound equipment at this time? Why or why not?
Business
1 answer:
Kay [80]3 years ago
7 0

Answer:

Deep South should not buy the equipment as the cash flows in three years would be $172,400 which is less than the price of the sound equipment and therefore they will not be able to pay the loan.

Explanation:

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Answer:

a- Red Hot is less efficient than Maverick Cycles in producing goods.

Explanation:

Given data

The Red Hot's Cost of goods sold/Revenue = 63.4%

And, the Cost of goods sold/Revenue of Maverick Cycles = 54.2%

By considering the above information, we can see that in the red hot case, the percentage is higher whereas in the maverick cycles the percentage is lower than reflecting the less efficient in the red hot case as the cost value that is incurred for producing the goods and services is higher than the sales revenue while in another case, the cost is lower as compared to the red hot

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An early warning signal for the potential of an overdrawn budget is created when: contingency funds are applied for. a bottom-up
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3 years ago
Hulse Company had the following transactions pertaining to stock investments. Feb. 1 Purchased 600 shares of Wade common stock (
kicyunya [14]

Answer:

(a)

                          Dr.          Cr.

Feb 1

Investment     $7,200

Cash                            $7,200

Jul 1

Cash               $600

Dividend Income        $600

Sep 1

Cash               $4,300

Gain on sale                 $700

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Explanation:

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8 0
3 years ago
MC Qu. 112 A company is considering... A company is considering the purchase of new equipment for $105,000. The projected annual
Alina [70]

Answer:

Net Present Value =  $660.98  

Explanation:

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= $  660.98  

3 0
3 years ago
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