A WIDE variety of typefaces are available for business writers. Different typefaces suggest different purposes and occasions.

Peng Company is considering buying a machine that will yield income of $2,100 and net cash flow of $19,500 per year for three ye

irina [24]

The accounting rate of return for this investment given its income, cost of the machine and the salvage value is 8.05%.

<h3>What is the accounting rate of return?</h3>

The accounting rate of return is a capital budgeting method used to determine the level of profitabiliy of an investement.

Accounting rate of return = Average net income / Average book value

Average book value = (cost of equipment - salvage value) / 2

Average book value = (59700 - 7500) / 2 = $21,600

Accounting rate of return = $2100 / 21600 = 8.05%

To learn more about Accounting rate of return, please check: brainly.com/question/13034173

#SPJ1

3 0

2 years ago

Suppose a perfectly competitive market is suddenly transformed into a monopoly (all competing firms are consolidated into a sing

Digiron [165]

just you know what it must be that i think

Explanation:

suppose a perfectly competitive market is sufdenly what think so

5 0

3 years ago

During the current year, Walter invests $35,000 in each of two separate corporations. Each investment gives him a 20% ownership

Bond [772]

Answer:

B) Only statement II is correct.

II. Has $20,000 of taxable income from Corporation Z.

Explanation:

One of the disadvantages of a C Corporation is that their owners (stockholders) are double taxed. That means that the corporation is taxed and then the stockholders are taxed depending on the dividends that they receive. In this case, Walter has $10,000 of taxable income from Corporation X (= $50,000 x 20%).

On the other hand, sole proprietorships, partnerships, limited liability companies and S Corporations are not taxed, they are pass through entities whose owners are taxed directly. In this case, Walter owns 20% of Corporation Z, therefore he must pay taxes on 20% of taxable income = $100,000 x 20% = $20,000.

8 0

3 years ago

Your plan is to work for 40 years after graduations. You will invest monthly. You plan to start at the end of your first month w

Scrat [10]

Answer:

i. The present worth of the investment is:

= $47,876.51

ii. The investment account will have $9,304,816.43 after 40 years of dumping money into it.

iii. You can withdraw $33,093.11 monthly.

Explanation:

a) Data and Calculations:

Monthly investment = $300

Rate of salary increase = 6% per year.

Monthly increment in investment = 0.5%

Interest rate = 0.75% per month

Total increment = 1.25% per month (0.5% + 0.75%)

From an online financial calculator:

N (# of periods) 480

I/Y (Interest per year) 1.25

PMT (Periodic Payment) 300

FV (Future Value) 9304816.43

Results

PV = $47,876.51

N (# of periods) 480

I/Y (Interest per year) 1.25

PV (Present Value) 0

PMT (Periodic Payment) 300

Results

FV = $9,304,816.43

Sum of all periodic payments $144,000.00

Total Interest $9,160,816.43

Starting Principal $9304816.43

Interest / Return Rate 3

Inflation Rate 0

Years to Payout 40 years

Payout Frequency Monthly

Result

You can withdraw $33,093.11 monthly.

Total interest earned: $6,579,874.12.

8 0

3 years ago

Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by chan

pochemuha

Answer:

Dropping Sour would lead to a net loss of $(1,900)

Explanation:

To determine whether or not it will be profitable to drop a loss making product, we compare the savings in fixed cost to the lost contribution from dropping it.

It is noteworthy that only the fixed cost attributed to the product would be saved should it be discontinued.

The incremental analysis is done as follows:

Direct fixed cost of Sour = 30%× 7,000 = 2,100

Lost contribution = sales value - variable cost = 10,000-6,000= 4,000

$

Lost contribution (4,000)

Savings in fixed cost <u> 2,100</u>

Net loss in contribution <u>(1,900</u>)

Dropping Sour would lead to a net loss of $(1,900)

8 0

3 years ago