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Alex
2 years ago
10

Suppose a company owns a fancy 3D printer which cost $1500 to buy. The printer depreciates $200 per year. (a) If the interest ra

te is 3 percent, what is the implicit rental price of the printer per year? (b) Does your answer to part (a) depend on whether the company used its own money to buy the printer, or if it took out a loan? Why? Suppose a newer edition of the 3D printer comes out for $2000. Because better technology is used, there is less depreciation; it only depreciates by $150 a year. (c) Calculate the implicit rental price for the new edition of the printer. Which edition of the printer - old or new - has a larger implicit rental price? (d) Suppose the interest rate was instead 5 percent, rather than 3 percent. Which edition of the printer - old or new - has a larger implicit rental price? Compare your answer with part (c), and comment on any difference.
Business
1 answer:
egoroff_w [7]2 years ago
6 0

Answer:

a) Implicit Rental Price:

Normal annual cost = $200

3% of $1,500           =      45

Implicit rental price = $245

b) The answer to part (a) does not depend on whether the company used its own money to buy the printer or if it took out a loan, provided that the cost of the loan remains within the 3% accepted rate.  The reason for my answer is that the calculation of the implicit rental price is an economic measurement that tries to capture the opportunity cost of a project and not just the actual cost.

c) Implicit Rental Price:

Normal annual cost = $150

3% of $2,000          =     60

Implicit rental price = $210

The old edition of the printer has a larger implicit rental price.

d) Interest rate = 5%

Old edition: Implicit Rental Price:

Normal annual cost = $200

5% of $1,500           =      75

Implicit rental price = $275

New Edition:

Normal annual cost =  $150

5% of $2,000          =    100

Implicit rental price = $250

The old edition of the printer still has a higher implicit rental price of $270 compared to the new edition's $250, with a difference of $20.

Explanation:

Determining the implicit rental price for the 3D printer, one is forced to consider the lost interest that the investment in the printer would occasion.  By this, the use of the implicit rental price ensures that the only cost of a project is not the direct costs, but also includes some opportunity costs.  Opportunity costs are costs incurred from the revenue lost because another option is chosen.

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You have saved​ $120,000 for your child to attend college. If it is in an account earning an annual rate of​ 8%, how much can yo
harkovskaia [24]

Answer:

I will take $36,230.5 to pay for the education of child.

Explanation:

Cash Invested in the saving account will earn a return of 8% each year and this amount could be withdrawn by the me to pay for the education of child.

We will use following formula to calculate the annual payments

P = r ( PV ) /  [ 1 - ( 1+ r )^-n ]

where

PV = amount of investment = $120,000

r = rate of return = 8%

n = number of period = 4 years

P = 8% ( 120,000 ) / [ 1 - ( 1 + 0.08 )^-4 ]

P = 36,230.5

3 0
3 years ago
What are the criticisms of fiscal policy
vesna_86 [32]

Answer:

Fiscal policy is the adjustment of tax rate and government spending that is used to handle current economic situation.

There are several of criticism that usually found on fiscal policies.

- Time Lags.

The effect of fiscal policies could only be felt years after the policies are made. Often times, this goes unnoticed by the citizens of the country, making it look like that the government took no action to handle their economic issues.

- Strengthening foreign influence

One of the things that the government can do to reduce the inflation is by selling government bonds to the public. These bonds can be bought by companies from another countries. This will strengthen that country's influence over US economy.

- It could create a budget deficit for the next government officials.

Government in United States were reshuffled between 2-4 years. While the effect of fiscal policies could need more than 10 years before it actually can be felt.  Sometimes, fiscal policies taken by previous government could create a deficit that had to be handled by the next government after the election.

4 0
3 years ago
A number between 1 and 15
alexgriva [62]

Answer:

The probability is 0.20 or 20%

Explanation:

we know that

The probability of an event is the ratio of the size of the event space to the size of the sample space.  

The size of the sample space is the total number of possible outcomes  

The event space is the number of outcomes in the event you are interested in.  

so  

Let

x------> size of the event space

y-----> size of the sample space  

so

P=\frac{x}{y}

In this problem we have  that

Multiple of 5 between 1 and 15 = 5, 10,15

so

x=3

Total numbers between 1 and 15=15

so

y=15

substitute

P=\frac{3}{15}=0.20

Convert to percentage

P=0.20(100)=20\%

8 0
3 years ago
The comparative balance sheets and income statement for Bingky Barnes Inc. are as follows:
MatroZZZ [7]

Answer:

Bingky Barnes Inc.

Statement of Cash Flows for the year ended December 31, Current Year

(using the indirect method)

Operating activities:

Net income                          $11,900

Add non-cash expenses:

Depreciation                          5,400

Adjusted operating            $17,300

Changes in working capital:

Accounts receivable            -3,800

Merchandise inventory       -3,700

Accounts payable               +8,800

Accrued wages expense       -400

Net operating cash flow   $18,200

Investing activities:

Property & equipment   -$20,700

Financing activities:

Note payable, long-term    -6,300

Common stock and

additional paid-in capital +16,700

Net cash from financing  $10,400

Net cash flows                   $7,900

Explanation:

a) Data and Calculations:

Comparative balance sheets and income statement

                                                   Current Year     Prior Year    Change

Balance sheet at December 31

Cash                                                  $37,300       $29,400       +7,900

Accounts receivable                          32,700          28,900       +3,800

Merchandise inventory                     42,000          38,300        +3,700

Property and equipment                  121,500        100,800      +20,700

Less: Accumulated depreciation    (30,700)        (25,300)

Total assets                                 $202,800        $172,100

Accounts payable                          $36,700        $27,900        +8,800

Accrued wages expense                   1,400             1,800            -400

Note payable, long-term                 44,500         50,800         -6,300

Common stock and

 additional paid-in capital              89,600         72,900       +16,700

Retained earnings                          30,600          18,700      

Total liabilities and equity         $202,800      $172,100

Income statement for current year

Sales                                         $123,000

Cost of goods sold                      73,000

Other expenses                           38,100

Net income                                 $11,900

Additional Data:

a. Equipment bought for cash, $20,700

b. Long-term notes payable was paid off for $4,800?

c. Issued new shares of stock for $16,400 cash.

d. No dividends were declared or paid.

e. Other expenses:

Depreciation, $5,400

Wages            20,100

Taxes,               6,100

Other,              6,500

f. Assume that expenses were fully paid in cash, when there are no liabilities account related to them. For example, tax expenses are paid in cash since there is no taxes payable.

Wages Payable

Beginning balance             $1,800

Wages expense $20,100

Ending balance      1,400

Cash paid                           19,700

7 0
3 years ago
Amir, who files single, has AGI of $58,000 and incurred the following itemized deductions this year: Union dues and work uniform
kari74 [83]

Answer:

$890

Explanation:

With respective to tax perspective, the following items are not available for deductions which are shown below:

1. Union dues and work uniforms

2. Home office expenses

3.  Unreimbursed employee expenses

The gambling losses are extent to the gambling winnings i.e $890 is available for the itemized deductions. The 2% rate is not applicable.

7 0
2 years ago
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