Answer:
It is a better deal to keep the old equipment
Explanation:
![\left[\begin{array}{cccc}&New&Old&Differential\\$leasing cost&0&-23,000&23,000\\$operarting cost&-26,000&-12,500&-13,500\\$operating income&-26,000&-35,500&9,500\\$tax shield&4,200&0&4,200\\$Result&-21,800&-35,500&13,700\\\end{array}\right]](https://tex.z-dn.net/?f=%5Cleft%5B%5Cbegin%7Barray%7D%7Bcccc%7D%26New%26Old%26Differential%5C%5C%24leasing%20cost%260%26-23%2C000%2623%2C000%5C%5C%24operarting%20cost%26-26%2C000%26-12%2C500%26-13%2C500%5C%5C%24operating%20income%26-26%2C000%26-35%2C500%269%2C500%5C%5C%24tax%20shield%264%2C200%260%264%2C200%5C%5C%24Result%26-21%2C800%26-35%2C500%2613%2C700%5C%5C%5Cend%7Barray%7D%5Cright%5D)
each year the new equipment generates a 13,700 adidtional cash outflow
We should check if the cost saving per year at 8% will have a present value lower than the proceed from the sale:
C 13,700.00
time 5
rate 0.08
PV $59,076.1377
As the differential cost exceeds the amount of proceed we would get if the old equipment is sold we already conclude we should keep it
Answer:
c. investors see better long-term prospects for Amazon
Explanation:
As we know that Amazon has the more customer base in the market due to which the shareholder predicted the expected profit in upcoming years. The company could run in long run. Even the ompany suffered huge losses due to discount provided but the investors are ready to invest in this company as they seen there is a better and long term prospects
Therefore according to the given situation, the option c is correct
Answer:
Resource dependence perspective of the organization assist an organization in reducing the extent of risk involved in operating environment.
Explanation:
Managers should always try to succeed and survive on their own and reduce the dependence on other organisation.
If i were the firm, the action i would take to succeed and survive includes;
1. By maintaining good relations with the labor and treat them right. this way, they wouldn't feel the need to find another job.
2. The Small firm should also maintain a good relation with the larger firm. and the small firm can also introduce innovative products. so as to increase turnover, higher profit rate and expansion.
Futhermore, Larger companies can assume role as product distributors and business partners. both the large firm and small firm can broaden their global prospects by forming partnership that capitalise on their complementary strengths. at the same time respecting the independence of each.
Answer:
the inflation rate was 8 percent and the nominal interest rate was 11 percent
Explanation:
Nominal interest rate is the rate without considering the inflation.
Answer:
$320,000 or $0.32 million
Explanation:
In accounting, the percentage of bad debt expenses is applied to the outstanding accounts receivable at the end of a particular accounting period.
In the question, the end of the accounting period is given as December 31 and the outstanding accounts receivable as at that December 31 is a total of $6.40 million. Therefore, we will disregard other values and simply apply 5% to the the outstanding accounts receivable of $6.40 million as at that December 31 as follows:
Bad debt = Outstanding accounts receivable × 5%
= $6.40 million × 5%
= $6,400,000 × 5%
= $320,000
Therefore, the amount of bad debt expense to recognized for the year is $320,000 or $0.32 million.
