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
scoundrel [369]
3 years ago
5

A company is planning to purchase a machine that will cost $25,200 with a six-year life and no salvage value. The company expect

s to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine
Business
1 answer:
Paha777 [63]3 years ago
8 0

Answer:

Net annual average profit

= Net cashflow - Depreciation                                                                                              

= $6,000 - $4,200

= $1,800 per annum

Depreciation

= <u>Cost - Residual value</u>

   Estimated useful life                                                                                                                                                          

= $<u>25,200 - 0</u>

       6 years

= $4,200 per annum

Accounting rate of return

= <u>Average profit</u>  x 100                                  

  Initial outlay

= <u>$1,800</u>  x  100

  $25,200

= 7.14%

             

Explanation:

Accounting rate of return is the ratio of average profit to initial outlay multiplied by 100. Average profit is calculated as net cashflow minus depreciation. Depreciation is calculated as cost minus residual value divided by estimated useful life of the machine.

Accounting rate of return is average profit divided by initial outlay multiplied by 100.

You might be interested in
Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project beta) that will require an initial
N76 [4]

Answer:

c) -$877,874d

Explanation:

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

NPV can be calculated using a financial calculator

Cash flow in :

Year 0 = $-2,225,000

year 1 = $375,000

year 2 = $425,000

year 3 = $400,000

year 4 = $475,000

I = 9%

NPV = $-877,873.94

5 0
3 years ago
If a plan sets long term goals for an organization it is
Archy [21]

There are six types of business plans:

<span>1.      </span><span>Start-up – details the steps to start a new business.</span>

<span>2.      </span>Internal -  targets an audience within the business

<span>3.      </span>Strategic - details company’s goals and how to achieve them, lays out a foundational plan for the company

<span>4.      </span>Feasibility - describes the need for the product or service, makes recommendations

<span>5.      </span>Operations -  are internal plans that consist of elements related to company operations

<span>6.      </span>Growth plans.- are expansion plans written for internal or external purposes

If a plan sets long-term goals for an organization it is strategic planning.

3 0
3 years ago
What is the difference between a public and a private corporation?
viva [34]

The principal difference between public and privately held companies is that public companies have shares that can be publicly traded on a stock market. A privately held company might become a publicly held company by conducting an initial public offering, which is the offering of shares of the company to the public.

6 0
3 years ago
What is the prime reason that Jenny's discretionary income is more volatile than her salary?
sweet [91]

Answer:

c. Her mortgage payments and necessities are fixed

Explanation:

Discretionary income is the remaining income after being paid out for all fixed expenses (i.e. Discretionary income = Salary - Mortgage - Income tax etc). The primary reason for variability in it is due to the mortgage payment and fixed expenses from the basic salary received.

So, option c is correct while other options are incorrect as tax does not affect as well as cost of living

7 0
3 years ago
Menthorp Inc. wants to design a variable-pay plan that fosters teamwork and business knowledge of its employees. In order to ens
Elena-2011 [213]

Answer:

cash profit sharing plan -

Explanation:

cash profit-sharing plan - it is one of the sharing plans in the profit-sharing plan. in this profit share directly to the employee through cash, stock, etc.

it is the sharing that is based on profit earned by the organization quarterly or annually. and its whole sole company how much they need to share among the employee.

4 0
3 years ago
Other questions:
  • The following information is available for Oriole Company
    15·1 answer
  • On January 8, Lee Co. borrows $100,000 cash from National Bank by signing a 90-day, 6% interest-bearing note. On April 8, Lee Co
    10·1 answer
  • Identity and explain the type of adjustment raised in each transaction entered into by ABC Ltd. show how each adjustment will be
    14·1 answer
  • If a firm’s business activities do not result in profit maximization, whilst alternatives exist, then such activities amount to
    8·1 answer
  • Use the following information to answer this question. Windswept, Inc. 2017 Income Statement ($ in millions) Net sales $ 11,400
    6·1 answer
  • A concern of using 360-degree evaluation is that: a. this system has no scope for employee collusion. b. raters feel accountable
    13·1 answer
  • When Alfred Nobel died, he left the majority of his estate to fund five prizes, each to be awarded annually in perpetuity starti
    9·1 answer
  • Burnett Corp. pays a constant $8.75 dividend on its stock. The company will maintain this dividend for the next 10 years and wil
    14·1 answer
  • Revenue is $6,000,000 the first year. You anticipate that it will increase by 6% a year for the subsequent 5 years. Assume an in
    7·1 answer
  • Beginning inventory, purchases, and sales for Item Zeta9 are as follows: Oct. 1 Inventory 200 units at $30 7 Sale 160 units 15 P
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!