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laiz [17]
3 years ago
15

The management of River Corporation is considering the purchase of a new machine costing $380,000. The company's desired rate of

return is 6%. The present value factor for an annuity of $1 at the interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment:Year Income from Operations Net Cash Flow1 $20,000 $95,0002 $20,000 $95,0003 $20,000 $95,0004 $20,000 $95,0005 $20,000 $95,000
The cash payback period for this investment is:
a. 5 yearsb. 4 yearsc. 3 yearsd. 20 years
Business
1 answer:
Westkost [7]3 years ago
6 0

Answer:

option (b) 4 years

Explanation:

Data provided in the question:

Cost of the new machine = $380,000

Annual cash flow = $95,000

Rate of return = 6% = 0.06

The present value factor = 4.212

Now,

The cash payback period for this investment

= [ Amount invested ] ÷ [ Annual Net cash flow]

= $380,000 ÷ $95,000 per year

= 4 years

Hence,

The answer is option (b) 4 years

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Answer:

Wildhorse Company

The amount of the inventory is:

= $30,496.

Explanation:

a) Data and Calculations:

Item No. Quantity    Cost per   Estimated   Cost to  NRV  LCNRV Inventory

                                   Unit      Selling Price     Sell                              Value

1320         1,400         $3.78       $5.31           $1.89   $3.42  $3.42    $4,788

1333          1,100            3.19         4.01              1.18      2.83    2.83        3,113

1426        1,000            5.31         5.90            1.65      4.25    4.25      4,250

1437        1,200            4.25         3.78            1.59      2.19     2.19      2,628

1510          900            2.66         3.84            1.65      2.19     2.19        1,971

1522         700            3.54         4.60           0.94      3.66    3.54       2,478

1573      3,200             2.12         2.95            1.42      1.53     1.53       4,896

1626      1,200            5.55         7.08             1.77      5.31     5.31       6,372

Inventory value =                                                                            $30,496

4 0
3 years ago
A company uses a periodic inventory system and during the December 31, year-end physical inventory count discovered that they ha
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Answer:

Debit: Shrinkage expense $300

Credit: Inventory $300

Explanation:

When your business experiences shrinkage, you must adjust your accounting books. Record inventory losses by increasing your Shrinkage Expense account and decreasing your Inventory account.

Debit your Shrinkage Expense account and credit your Inventory account.

To adjust for shrinkage, create a journal entry that looks like this:

Debit Shrinkage expense account by $300

Credit Inventory account $300

5 0
3 years ago
Your bank card has an APR of 21% and there is a 3% fee for cash advances. The bank starts charging interest on cash advances imm
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Answer:

Total finance charge=$23.75

Explanation:

<em>The amount charged for the use of the fund by a bank is called interest rate. Here it is quoted as 21% per annum but we will need to determine the approximate monthly rate by dividing by 12</em>.

The total finance charge will be equal = Interest rate + advance fee

Monthly interest rate = 21/12 =1.75%

Interest payment = 1.75%× $500=$8.75

Advance fee = 3%× $500= $15

Total finance charge = $8.75 +  $15= $23.75

Total finance charge=$23.75

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