Answer: 14%
Explanation:
To calculate the Annual Rate of Return on such a project, you divide the Average net profit that the project is expected to make by the Average investment value.
This in effect compares future income to the investment in the project and so is a very useful tool in analysis.
Annual Rate of Return = Average Net Profit / Average Investment
Average Net Profit.
A new salon will normally generate annual revenues of $64,160, with annual expenses (including depreciation) of $40,500.
The net profit is revenue less expenses so,
= 64,160 - 40,500
= $23,660
Average Investment
The Average Investment is calculated by taking the average of the Initial Value of the project and it's ending value.
Initial value is $262,000 as that was the cost.
The Ending Value is the salvage value of $76,000.
= (262,000 + 76,000) / 2
= $169,000
The Annual Rate of Return is,
= 23,660 / 169,000
= 0.14
= <u>14%</u>
Answer:
the size of the banks actual reserves is $38,000
Explanation:
The computation the size of the bank actual reserve is shown below:
But before that the required reserve is
= Reserve ratio × checkable deposit
= 20% × 150,000
= $30,000
Now the actual reserve is
= Required reserve + excess reserve
= $30,000 + $8,000
= $38,000
Hence, the size of the banks actual reserves is $38,000
Answer:
Explanation: current assets are assets other than fixed asset that a company uses in its day to day operations and are noted in the Balanced sheet of an organisation and they include:
Cash, Account receivable, Inventory, Supplies.
From the above question, the current asset of Buffalo Industries is stated below:
Balanced Sheet (extract)
Current assets :
Cash $97,340
Merchandise inventory $167,950
Supplies. $12,560
Total current asset. $277,850