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Ipatiy [6.2K]
3 years ago
12

Pepper Company is using the annual rate of return to evaluate a potential investment. The original investment required is $120,0

00, and the investment’s salvage value is $20,000. What is the average investment that Pepper will use when computing the annual rate of return?
A : $60,000

B : $70,000

C : $50,000

D : Cannot be determined unless the useful life of the project is known.
Business
1 answer:
Naily [24]3 years ago
3 0

Answer:

B : $70,000

Explanation:

The formula and the computation of the  annual rate of return is shown below:

= Annual net income ÷ average investment

where,  

Annual net income is XXXXX

And, the average investment would be

= (Original investment required + salvage value) ÷ 2

= (120,000 + $20,000) ÷ 2

= $140,000 ÷ 2

= $70,000

By placing these values we can easily compute the annual rate of return

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Katlin Markets is debating between a levered and an unlevered capital structure. The all-equity capital structure would consist
Goshia [24]

Answer:

e. $42,857.14

Explanation:

The computation of the break-even level of earnings before interest and taxes between these two options is shown below:

(EBIT) ÷ (Number of shares) = (EBIT - Interest) ÷ Number of shares  

(EBIT) ÷ (75,000 shares) = (EBIT - $20,000) ÷$40,000

40,000 × EBIT = 75,000 × EBIT - $1,500,000,000

35,000 × EBIT = $1,500,000,000

After solving this,  

The EBIT would be $42,857.14

The interest expense

= $320,000 × 6.25%

= $20,000

8 0
3 years ago
Last year, Cool Lope, Inc. had an inventory turnover rate of 6.8. This year, the turnover rate is 7.1. Based on this information
AnnyKZ [126]

Answer:

The answer is D.

Explanation:

Inventory turnover is a measure of the number of times inventory is sold in a given period of time period such as in a quarter or in a year.

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Higher inventory is better than lower inventory because the higher the inventory turnover, the better a business is selling goods(inventories) very quickly and that demand for their product exists. While low inventory turnover depicts weaker sales and declining demand for a company's products

8 0
3 years ago
The following are the unit costs of making and selling an item at a volume of 30,000 units per month, which represents the compa
nadezda [96]

Answer:

$7.90 per unit

Explanation:

The computation of the   minimum price on these defective units is shown below:

It is equivalent to the selling & admin variable cost per unit i.e. $7.90 per unit

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Therefore the second option is correct

5 0
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Elan Coil [88]

Answer:

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Multi-product branding is a branding strategy in which a company uses one name for all of its products in a product class.

Multi-product branding is a business strategy widely used by manufacturers, it involves producing and selling multiple products using the same brand name for all.

For instance, Pears may have Pears diapers, clothing lines, lipstick ranges, shoes, body lotions, eye shadow, foundation etc. They are all different products manufactured and all branded as Pears.

The merits and advantages of Multi-product branding is high brand awareness, low promotional and advertising costs, and brand equity return.

8 0
3 years ago
Describe an example of a company that manufactures a product.
dexar [7]
General Motor Company(GMC) is a manufacturing company that manufactures automobiles in U.S.A.
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