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
Rama09 [41]
3 years ago
7

A company is considering the purchase of a new machine for $48,000. Management expects that the machine can produce sales of $16

,000 each year for the next 10 years. Expenses are expected to include direct aterials, direct labor, and factory overhead totaling $8,000 per year plus depreciation of $4,000 per year. All revenues and expenses except depreciation are on a cash basis. The payback period for the machine is?
Business
1 answer:
joja [24]3 years ago
5 0

Explanation & answer:

Cash basis, so all monies retain same values over the years.

Let x = payback period in years

Salvage value of machine

= 48000 - 4000x

Sales

= 16000x

Total revenue after x years

R = 16000x

Expenditures over x years

C = Cost of machine + materials + depreciation

= 48000 + 8000x + 4000x

= 48000 + 12000x

For payback

R = C

16000x = 48000 +12000x

Solve for x

x = 48000/4000 = 12 years

By that time, the machine has no more salvage value.

You might be interested in
To create an indian flag as per the standard ratio​
adell [148]
Anwser - 3:2 I’m not sure if u still need help
5 0
2 years ago
Net present value LO P3 Beyer Company is considering the purchase of an asset for $250,000. It is expected to produce the follow
Marysya12 [62]

Answer:

$20,996.49

Yes

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be found using a financial calculator.

Cash flow in year 0 = $-250,000

Cash flow in year 1 = $83,000

Cash flow in year 2 = $43,000

Cash flow in year 3 = $76,000

Cash flow in year 4 = $127,000

Cash flow in year 5 = $49,000

I = 12%

NPV = $20,996.49

The company should accept the project because the NPV is postive.

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

8 0
3 years ago
Read 2 more answers
A corporate CEO wished to relay good news about the prospect of a new technology being created, but was reluctant to do so. Inst
borishaifa [10]

Answer:

Information signaling

Explanation:

Information signalling is defined as the various actions a firm takes that communicates it's financial outlook. For example if a firm releases a dividend policy it communicates the value of the firm's stock.

In this scenario the CEO announced increase in the firm's dividend. This will convey to investors that the company has a competitive advantage which will result in additional income, so dividends are being raised.

It is an indirect way of announcing good news about the prospect of a new technology being created.

7 0
3 years ago
A company orders office supplies in June. Those supplies are received and used in July. The supplies are paid for in August. In
Leviafan [203]

Answer:

Expense must be recognized in July

Explanation:

The reason is that the expense must be recognized in the month in which the supplies are used because the accrual concept says that the expenses must be realized when they are incurred. Incurred means that the consideration received has been used. For example if I pay the telecommunication network in June to give 4G internet and the services are delivered in the month July then the expenses will be realized in the month in which the services were used and that is July for internet facilities. So in this case the supplies are used in the month of July which is in-accordance with the accrual concept.

8 0
2 years ago
Direct labor and overhead costs incurred to change raw materials into finished products are known as
san4es73 [151]

Answer:

conversion costs

Explanation:

5 0
2 years ago
Other questions:
  • Which businesses make up the extractive industry
    14·1 answer
  • On january 31, jean consulting company receives a bill for that month’s utilities in the amount of $500. jean sets it aside beca
    10·1 answer
  • 2016 may 1 received a $5,300, 12-month, 3% note in exchange for an outstanding account receivable from r. stoney. dec. 31 accrue
    7·1 answer
  • On January 2, 2017, Swify Corporation began construction of a new citrus processing plant. The automated plant was finished and
    8·1 answer
  • Michael Angelo's Pepperoni Mini Calzones are easy-to-prepare snacks, but the manufacturer believes customers are not buying the
    11·1 answer
  • Pyschographic segmentation involves grouping people based on where they live.
    11·1 answer
  • A government annually collects $320 billion in tax revenue and allocates $80 billion to education spending. What percentage of t
    10·1 answer
  • Rachel's Designs has 2,000 shares of 7%, $50 par value cumulative preferred stock issued at the beginning of 2019. All remaining
    10·1 answer
  • Name 3 career paths trade schools offer.
    15·1 answer
  • Which of the following is most likely to have inelastic demand?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!