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Alisiya [41]
3 years ago
6

Lakeland Company is considering the purchase of equipment for $150,000. The equipment will expand the Company's production and i

ncrease revenue by $40,000 per year. Annual cash operating expenses will increase by $10,000. The equipment's useful life is 10 years with no salvage value. Lakeland uses straight-line depreciation. The income tax rate is 35%. What is the average rate of return on the investment?
a. Increase in revenue?
b. Increase in expenses?
c. Pretax income from investment?
d. Income tax expense?
e. Net income from investment?
Business
1 answer:
bearhunter [10]3 years ago
3 0

Answer:

13%

Explanation:

The computation of the average rate of return on the investment is shown below:

= Annual net income ÷ average investment

The annual net income is shown below:

Increase in revenue $40,000

Less: Increase in expenses ($25,000)

Pretax income from investment $15,000

Less: Income tax expense $5,250      ($15,000 × 35%)

Net income from investment $9,750

The computation is shown below:

For increase in expense

= Annual cash operating expenses + Depreciation expense based on straight line method

= $10,000 + ($150,000 - $0 ÷ $10,000)

= $10,000 + $15,000

= $25,000

And, the average investment would be

= (Initial investment + salvage value) ÷ 2

= ($150,000 + $0) ÷ 2

= $150,000 ÷ 2

= $75,000

Now put these values to the above formula  

So, the rate would equal to

= $9,750 ÷ $75,000

= 13%

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The next dividend payment by Savitz, Inc., will be $2.34 per share. The dividends are anticipated to maintain a growth rate of 4
STALIN [3.7K]

Answer:

a. 10.8%

b. 6.32%

c. 4.5%

Explanation:

a. Required return= (Expected dividend payment/current stock price) + dividend growth rate

Required return= (2.34/37)+0.045

Required return= 0.108  ⇒ 10.8%

b. Dividend yield= dividend per share / price per share

Dividend yield= 2.34/37= 0.0632 ⇒ 6.32%

c. The capital gains yield refers to the rise in the price of the stock. In this case, the statement indicates that the dividends are anticipated to maintain a growth rate of 4.5 percent forever and according to the definition of capital gains yield that would be the answer for the expected capital gains yield.

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3 years ago
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In order to better understand what motivates human beings, Maslow proposed that human needs can be organized into a hierarchy.

Maslow organized human needs into a pyramid that includes (from lowest-level to highest-level) physiological, safety, love/belonging, esteem, and self-actualization needs.

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If these needs are not satisfied the human body cannot function optimally. Maslow considered physiological needs the most important as all the other needs become secondary until these needs are met.

2. Safety needs - once an individual’s physiological needs are satisfied, the needs for security and safety become salient. People want to experience order, predictability and control in their lives. These needs can be fulfilled by the family and society (e.g. police, schools, business and medical care).

For example, emotional security, financial security (e.g. employment, social welfare), law and order, freedom from fear, social stability, property, health and wellbeing (e.g. safety against accidents and injury).

3. Love and belongingness needs - after physiological and safety needs have been fulfilled, the third level of human needs is social and involves feelings of belongingness. Belongingness, refers to a human emotional need for interpersonal relationships, affiliating, connectedness, and being part of a group.

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3 0
3 years ago
Environmental recovery company RexChem Partners plans to finance a site reclamation project that will require a 4-year cleanup p
Elina [12.6K]

Answer:

728,839.57883 per quarter.

Explanation:

1. Effective Annual Rate = 10%

Effective rate continuously compounded = eln(1+r) - 1

ln(1.1) = 0.09531018

Montly rate = 0.09531018/12 = 0.07942515

e0.07942515 -1 = 0.00797414

Hence, monthly continuous rate =

0.797414%

2. Effective Quarterly rate

= (1+(Rate per year/52))Number of weeks

=(1+Rate per quarter)4,

(1+(0.15/52))208=(1+r)4,

r = 16.1583394% per quarter

Now, using the PMT function in excel,

=PMT(16.1583394%,16,-4100000)

728,839.57883

per quarter

Therefore In order to earn 15% per year compounded weekly on its investment at the end of each quarter, the company will have to get $728,839.57883

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The following data were gathered to use in reconciling the bank account of Savannah Company: Balance per bank $16,750 Balance pe
Reika [66]

Answer:

Adjusted Balance as per bank statement = $15,095

Adjusted Balance as per book = $15,095

Explanation:

given data

Balance per bank = $16,750

Balance per company records = 16,125

Bank service charges = 80

Deposit in transit = 2,195

NSF check = 950

Outstanding checks = 3,850

to find out

What is the adjusted balance on the bank reconciliation

solution

first we get here Adjusted Balance as per bank statement that is express as

Adjusted Balance as per bank statement = Balance per bank + Deposit in transit Outstanding checks     .......................1

put here value

Adjusted Balance as per bank statement = $16,750 + $2,195 - $3,850

Adjusted Balance as per bank statement = $15,095

and

Adjusted Balance as per book  will be here as

Adjusted Balance as per book = Balance per company record - Bank Service charges - NSF checks     ......................2

put here value

Adjusted Balance as per book = $16,125 - $80 - $950

so

Adjusted Balance as per book = $15,095

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What does the government spend its money on
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