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Roman55 [17]
4 years ago
5

Hartong Corporation is contemplating purchasing equipment that would increase sales revenues by $185,000 per year and cash opera

ting expenses by $89,000 per year. The equipment would cost $416,000 and have a 8 year life with no salvage value. The annual depreciation would be $52,000. The simple rate of return on the investment is closest to:A. 23.8%B. 12.5%C. 10.6%D. 23.1%
Business
1 answer:
krek1111 [17]4 years ago
8 0

Answer:

The simple rate of return on the investment is closest to: C. 10.6%

Explanation:

In Hartong Corporation:

Increasing net income = Increase sales revenues - Cash operating expenses - Annual depreciation expense = $185,000 - $89,000 - $52,000 = $44,000

This is the net income from the equipment per year

Return on the investment (ROI) is calculated by using following formula:

ROI = (Net income/Cost of investment )x 100%

Cost of investment  = Cost of equipment = $416,000

ROI = ($44,000/$416,000) x 100% = 10.6%

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Answer:

The correct answer is letter "D": discounting all expected future cash flows to reflect the time value of money.

Explanation:

Discounting cash flows takes place at any moment given when money is paid at one date but is received at a different point. Discounted cash flows are useful to measure the difference between the present value of money and the receivables that are expected to come at a later stage.

6 0
3 years ago
A firm may opt to pay millions of dollars for celebrity endorsements in order to:_____
Oxana [17]

A firm may opt to pay millions of dollars for celebrity endorsements in order to signal to consumers that the advertised product is appealing and likely to be popular.

A consumer is defined as an individual or business that consumes or uses goods or services. A customer is a buyer in the economy who buys goods and services and can exist as a consumer or as a sole customer.

Consumers are sometimes contrasted with producers. For example, a company that manufactures toothpaste is a producer. And if you buy this toothpaste, you are a consumer. However, be aware that people often produce and consume the same item.

It is the producers and consumers who buy and sell. Producers create or produce goods and provide services, and consumers buy those goods and services with money. Most people are both producers and consumers.

Learn more about  consumers here: brainly.com/question/380037

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5 0
2 years ago
Indiana jones goes off to foreign lands in search of artifacts hidden in dangerous places and guarded by fierce protectors. dr.
Sidana [21]
He would be described as “A sensation seeker”
3 0
3 years ago
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Stan
nexus9112 [7]

Answer:

Variable overhead rate variance  $1,050  unfavorable

Explanation:

<em>Variable overhead rate variance is the difference between the standard variable overhead cost allowed for the actual hours worked  and the actual variable overhead incurred for the period</em>

                                                                                             $

470 hours should have cost (470× $ 5.00)                       2,350          

but did cost                                                                        <u> 3,400 </u>      

Variable overhead rate variance                                    <u> 1050  un</u>favorable

       Variable overhead rate variance  $1,050  unfavorable                

8 0
3 years ago
A company purchased a weaving machine for $264,970. The machine has a useful life of 8 years and a residual value of $14,500. It
Nutka1998 [239]

Answer:

$37,455

Explanation:

The unit of production method of depreciation charges higher amounts of depreciation seasons of higher output.  The depreciation amount is propositional to the level of production.

The formula applicable in the calculation of the unit of depreciation is as follows.

Depreciation = depreciable value / estimated production value x units produced

For this machine: depreciable value = Asset cost - residual value

Depreciable value =$264,970- $14500 = $250, 470

Estimated units to be produced = 759,000 bolts

Units produced in the second year =113,500

Depreciation for the second year

=  250, 470/ 759,000 x 113,500

=0.33 x 113, 500

= $37,455

6 0
4 years ago
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