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3 years ago

In an equipment replacement decision, the cost of the old equipment is a(n)

Business

1 answer:

algol133 years ago

6 0

In an equipment replacement decision, the cost of the old equipment is called Bsunk cost.

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ankoles [38]

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Stocks is the type of investments that offers both capital gains and interest income.

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3 years ago

In the context of choosing an appropriate advertising media, at present the brands that cater to the older generations are not s

Lemur [1.5K]

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Social media is a very good way of protesting because many many people go on social media sites and they can join in and instead of being abused by other people outside you can easily make a protest on video or a website.

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3 years ago

Read 2 more answers

"You want to invest your savings of $20,000 in government securities for the next 2 years. Currently, you can invest either in a

JulijaS [17]

Answer:

Explanation:

In the former case that is investment in security that pays interest of 8% per year for the next 2 years , there is provision of fixed interest rate . That means one can be assured of interest rate of 8 % for two years but he can not get benefit of market fluctuation if interest rate if it rises above 8 % after one year .

In case of investment in security that matures in 1 year but pays only 6% interest , one can take the benefit of market fluctuation if interest rate rises above 8 % . So if there is likelihood that interest rate can rise above 8 % in future , one should invest in 6% security for one year and reinvest it after one year , in the same security or in other security which fetches higher rate of interest .

Apart from that , if there is a contingent liability of paying after one year , one can not go in for 2 year security as it will have to break prematurely , that will result in loss of interest .

So due to situation described above, one should prefer investment in one year security .

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3 years ago

Krell Industries has a share price of $ 21.05 today. If Krell is expected to pay a dividend of $ 0.89 this year and its stock pr

V125BC [204]

Answer:

Krell's dividend yield and equity cost of capital are 4.23% and 19.95%

Explanation:

Dividend yield = expected dividend/price today

= $ 0.89/$ 21.05

= 4.23%

Equity cost of capital = (Ending share price - Initial price + Dividend per share) / Initial price * 100

= [($24.36 - $21.05 + 0.89)/$21.05]*100

= 19.95%

Therefore, Krell's dividend yield and equity cost of capital are 4.23% and 19.95%

3 0

3 years ago

Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the company’s degree of operating l

Alex

Answer: 1. Degree of Operating Leverage = 4

2. $384,000

Explanation:

1. Degree of Operating Leverage is calculated by dividing the Contribution margin by the Net Operating income.

Now, the Contribution margin is the difference between Price and Variable Cost. This means that if you remove fixed costs from it as well you get your profit.

Therefore 1. can be calculated thus,

Degree of Operating Leverage = Contribution Margin / Net Operating income

Degree of Operating Leverage = 960,000 / 960,000 - 720,000

Degree of Operating Leverage = 4

2. When Sales increases by a certain percentage we multiply that percentage by the Degree of Operating Leverage to find out how much Income will increase by.

Because sales went up by 15%, Singh Co. can expect that income would rise by,

= 15% * 4

= 60%.

Now income is Contribution margin - fixed costs so we have,

Income = 960,000 - 720,000

Income = $240,000

An increase of 60% would be

= 240,000( 1+ 60%)

=$384,000

$384,000 is the amount of income that Singh Co. can expect.

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3 years ago