Answer:
Cash payback period= 3.2 years.
Explanation:
Lets first understand what a cash payback period is. As the name suggest, payback period is the time duration within which a business recovers it's investment and/or capital investment and the payback period is expressed in number of years. The formula for payback period is as follows:
Payback period= initial investment ÷ annual cash-flows
In the question annual operating income is given just for distraction.
payback period = $324000 ÷ 100000
payback period= 3.2 years.
This means if Hayden company decides to invest in the machine, it would recover the cost of machine (i.e it's investment) in approximately three and half years.
Answer:
(a) <u>Under Cash Basis of accounting</u>
Revenues and expenses are recorded either when payment is made or payment is received. It relates to accounting receipts and payments. The drawback of this approach being, it ignores accounting period as it places relevance on actual receipts and payments.
(b) <u>Under Accrual Basis of Accounting</u>
Under accrual basis, a transaction is recorded when income is earned and when expenditure is incurred and not when actual cash for the same has been received and paid for.
Accrual system of accounting is more prudent form of accounting and ensures transactions relating to a period are recorded and accounted for in that particular period.
Answer:
The depreciation expenses will be "950 and 3610". A further explanation is given below.
Explanation:
The given values are:
Cost,
= $21,500
Salvage value,
= $2,500
Asset's total life,
= $100,000
Now,
The Depreciation rate will be:
= 
On putting the values, we get
= 
= 
= 
So,
For the year 2021, the depreciation expense will be:
= 
= 
= 
For the year 2022, the depreciation expense will be:
= 
= 
= 
Answer:
No
Explanation:
Long term bonds might not be great investments if the interest rate fall or even slide into negative value in the future. This means that the bond will become insignificant in value.
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