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morpeh [17]
4 years ago
7

A company is evaluating three possible investments. Each uses the straightminusline method of depreciation. The following inform

ation is provided by the​ company: Project A Project B Project C Investment $ 220 comma 000 $ 54 comma 000 $ 220 comma 000 Residual value 0 28 comma 000 36 comma 000 Net cash​ inflows: Year 1 64 comma 000 36 comma 000 94 comma 000 Year 2 64 comma 000 27 comma 000 64 comma 000 Year 3 64 comma 000 23 comma 000 74 comma 000 Year 4 64 comma 000 20 comma 000 34 comma 000 Year 5 64 comma 000 0 0 What is the accounting rate of return for Project​ C? (Round your answer to two decimal​ places.)
Business
1 answer:
Lemur [1.5K]4 years ago
4 0

Answer:

Accounting rate of Return 22.28%

Explanation:

ARR:

\frac{average \: income}{average \: investment}

<u>Project C:</u>

investment    220,000

residual value 36,000

cash flow:

Year 1: 94,000

Year 2: 64,000

Year 3: 74,000

Year 4: 34,000

average cash flow:

(94,000 + 64,000 + 74,000 + 34,000)/4 = 66,500

depreciable amount:

220,000 - 36,000 = 184,000

depreciation per year: 184,000 / 4 = 46,000

net average operating income: 20,500

<u>average investment:</u>

220,000 - 36,000 = 184,000 / 2 = 92,000

ARR:

20,500 / 92,000 = 0,22282 ? 22.28%

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5 0
3 years ago
Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Co
Vesnalui [34]

Answer:

1. 120 hot dogs per day

2. $1,920

3. Inelastic

4.200

Explanation:

1. Break even is a term given to a situation where there is no profit or loss made by an organization for product sales.

Formula is;

Fixed cost /contribution per unit, where contribution per unit is selling price - variable price.

Solution.

Since Total fixed cost =$1,200, Selling price=$16, Variable costs=$6

=Fixed costs/(Selling price - Variable costs).

= $1,200/($16 - $6)

=$1,200/$10

=120 hot dogs.

2. Break even point in dollar sales volume. This refers to the number of products that would be produced and sold to cover production cost.

Formular is ;

Fixed cost/contribution per unit× Sales price per unit.

Solution

=Fixed costs/(Selling price - Variable costs)× Selling price.

=$1,200/($16 - $6)×$16

=$1,200/$10×$16

=$1,200×$16/$10

=$19,200/$10

=$1,920

3. The demand would be inelastic. Inelastic demand is when the demand of buyers does not change as much as changes in price.

4. Achieve level of sales target. This is when management wanted to know the sales level at which targeted profit will be achieved.

Formula

Fixed costs + Target profit/Contribution per unit

Solution.

=Fixed costs + Target profit/(Selling Price - Variable costs)

= $1,200 + $800/($16-$6)

=$1,200 + $800/($10)

=$2,000×/$10

=$200

=200 cases would needed to sell

6 0
3 years ago
Suppose that Japan is considering placing trade restrictions on imports of U.S. pharmaceuticals. It could choose either a tariff
Mamont248 [21]

Answer:

1) Japanese buyers of pharmaceuticals.

Instead of focusing on U. S pharmaceuticals, we can look for Japanese buyers of pharmaceuticals. The fact should be acknowledged that if both the policies result in the same quantity which is being imported, then the price paid by the Japanese buyers will be identical as well.

2) Japanese producers of pharmaceuticals.

If both policies are resulting in the same quantity of the import, then the Japanese producers should be indifferent to which trade restriction is selected.

8 0
3 years ago
Target Profit Outdoors Company sells a product for $110 per unit. The variable cost is $65 per unit, and fixed costs are $288,00
STatiana [176]

Answer:

Results are below.

Explanation:

Giving the following information:

Target Profit Outdoors Company sells a product for $110 per unit. The variable cost is $65 per unit, and fixed costs are $288,000.

<u>To calculate the break-even point in units, we need to use the following formula:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 288,000 / (110 - 65)

Break-even point in units= 6,400

<u>Now, we incorporate the desired profit in the formula:</u>

Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units= (288,000 + 54,720) / 45

Break-even point in units= 7,616 units

7 0
3 years ago
What is the most popular method of filing in Nepal?<br>why?​
PIT_PIT [208]

Explanation:

Alphabetical

classification is the most popular filing in nepal.In case name of more than one person starts with same letter then the second letter of name is taken into consideration.It is a flexible method.

3 0
3 years ago
Read 2 more answers
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