Answer:
The average amount invested in the asset that should be used for calculating the accounting rate of return is $348,500
Explanation:
For computing the average amount invested in the assets, following equation should be used which is shown below:
= (Production management cost + Residual value) ÷ 2
= ($630,000 + $67,000) ÷ 2
= $697,000 ÷ 2
= $348,500
In this the question has asked to compute the average so the amount should be divided by 2.
The cost saving should be irrelevant in the computation part because this is used in computing accounting rate of return. Thus, it is not been considered.
Hence, the the average amount invested in the asset that should be used for calculating the accounting rate of return is $348,500
Answer: Option (D) is correct.
Explanation:
The cost of capital is defined as the opportunity cost of making a certain investment which means that the rate of return that could be earned by putting the same amount of money into some other investment with the same level of risk. The cost of capital is generally higher in a purely capital market than it is in a global market.
<span>a hypothetical closed economy in which households spend the eDollars</span>
Answer:
$5,000
Explanation:
Calculation to determine what amount should Martin report as investment income from its ownership of Foster's shares
Using this formula
Amount to be reported as investment income=Net income*Percentage of outstanding shares purchased
Let plug in the formula
Amount to be reported as investment income=$25,000 x 20%
Amount to be reported as investment income= $5,000
Therefore The amount that Martin should report as investment income from its ownership of Foster's shares is $5,000
Answer: $3,350
Explanation:
GDP is the addition of value of goods and service minus purchase of intermediate goods.
Formula to calculate value-added by each firm is shown below:
Value-added = Sales by Firm + Change in stock – purchase of raw material
Value added by firm A = $5 × 200 + 0 – ($250 + $200)
= $550
Value added by firm B = $7 × 300 + 0 – ($150 + $100)
= $1,850
Value added by firm C = $1,000 + 0 - $50
= $950
Economy's GDP = Value added by firm A + Value added by firm B + Value added by firm C
= $550 + 1,850 + 950
= $3,350
The value of GDP is $3,350
