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son4ous [18]
4 years ago
12

Watson Corporation is considering buying a machine for $25,000. Its estimated useful life is 5 years, with no salvage value. Wat

son anticipates annual net income after taxes of $1,500 from the new machine. What is the accounting rate of return assuming that Watson uses straight-line depreciation and that income is earned uniformly throughout each year? Multiple Choice 6.0%. 8.0%. 8.5%. 10.0%. 12.0%.
Business
1 answer:
adoni [48]4 years ago
8 0

Answer:

12%

Explanation:

The computation of the accounting rate of return is shown below:

Accounting rate of return = Average profit ÷ Average investment

where

Average profit is

= $1,500 × 5 years ÷ 5 years

= $1,500

And, the average investment is

= $25,000 ÷ 2

= $12,500

So, the accounting rate of return is

= $1,500 ÷ $12,500

= 12%

We simply applied the applied formula

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Utility cost is a mixed cost with both fixed and variable components. using the highlow method, the cost formula for utility cos
777dan777 [17]
Based on the question, a table was found to supplement the needed data.

Problem: Found the utility cost

Given: 
Based on the given table             Units           Utility Cost

High-Level Activity                      $8,000         $8,000            
Low-level Activity                        $5000          $1,500

Mathematical Operation: multiplication, addition, subtraction and division

Solution:  Variable cost per unit (VSU), Change in Cost (CC), Cost in Activity (CA),  Fixed Cost  (FC), Variable Cost Element (VCE), Total Cost (TC) High-Level Activity Unit (HLAU)

VCU=  CC÷ CA
        = $1,500 ÷ 3,000 units
        = $0.50 per unit
Fixed cost = TC- (VCE [VCUx HLAU])
                  =  $8,000 - ($0.50 per unit × 8,000 units)
                  = $8,000 - $4,000
<span>                  = $4,000
</span>
The Choices are:
A.Y = $1.00 X
B.Y = $1.25 X
C.Y = $4,000 + $0.50 X
D.Y = $1,500 + $1.25 X

The answer is A.
7 0
4 years ago
Your firm has net income of $385 on total sales of $1,480. Costs are $810 and depreciation is $120. The tax rate is 30 percent.
DaniilM [7]

Answer:

Operating cash flow= 305.5

Explanation:

Giving the following information:

Your firm has net income of $385 on total sales of $1,480. Costs are $810 and depreciation is $120. The tax rate is 30 percent.

EBITDA= 385

Depreciation= (120)

EBIT= 265

Tax= (0.3*265)= (79.5)

Depreciation= 120

Operating cash flow= 305.5

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Sladkaya [172]
Around 7 months is the answer
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Firms that play it safe and do not enter the global market are likely to lose their chances to enter other markets ________.
DaniilM [7]
And risk losing their home markets.
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Which phase of financial life cycle includes ‘income tax reduction’?
ollegr [7]
It's from phase 2 (family maturity) to phase 3 (retirement).


I hope it helped you!

8 0
3 years ago
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