Answer:
<em>= $1,513,325.</em>
Explanation:
Book value as on date of sale = Cost-Accumulated depreciation
= 7,800,000*(1-0.2-0.32-0.192-0.1152)
= $1,347,840
Therefore gain on sale = 1,560,000 - 1,347,840
= $212,160
So, after-tax salvage value = Sale proceeds - (Tax rate * Gain on sale)
=1,560,000 - (212,160 * 0.22)
<em>=$1,513,325(Approx).</em>
Answer: Greater the MPC
Explanation:
The Marginal Propensity to consume refers to how much Economic consumption increases or decreases due to a change in income.
The formula for MPC is;
= Change in Consumption/Change in Income.
Consumption is a major component of GDP so it has a direct influence on Economic output. In other words, the larger the level of consumption, the higher the higher the output.
As evident from the equation, if the change in consumption is higher than the change in income, the MPC will be larger. A larger MPC therefore corresponds to a higher Consumption.
If a higher Consumption leads to a larger output and a larger MPC corresponds to a higher Consumption then that means that a higher MPC leads to a larger output.
Answer:
the present value of the annuity = $4,523,638
Explanation:
this is an ordinary annuity:
annual payment = $9,420,713 / 20 = $471,035.65
number of periods = 19 periods
interest rate = 8%
therefore, the present value annuity factor = 9.6036
the present value of the annuity = $471,035.65 x 9.6036 = $4,523,637.97 ≈ $4,523,638
Answer:
E) Only Machine B is acceptable
Explanation:
The computation is shown below;
<u>For Machine A </u>
<u>Year Cash Flow PV Factor PV of Cash Flow </u>
0 -$9,000 1 -$9,000
1 $5,000 0.8696 $4,348
2 $4,000 0.761 $3,044
3 $2,000 0.6575 $1,315
NPV -$293
<u>Machine B </u>
<u>Year Cash Flow PV Factor PV of Cash Flow </u>
0 -$9000 1 -$9,000
1 $1,000 0.8696 $869.6
2 $2,000 0.761 $1,522
3 $11,000 0.6575 $7,232.5
NPV $624.1
As we can see that from the above calculations that the npv for machine A is in negative so the same should not be accepted but for machine the npv is in positive so the same should be accepted
