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Crazy boy [7]
3 years ago
14

Compute the payback period for each of these two separate investments:

Business
1 answer:
musickatia [10]3 years ago
5 0

Answer:

1.89 years and 2.91 years

Explanation:

The formula to compute the payback period is shown below:

= Initial investment ÷ Net cash flow

For first case

The initial investment is $260,000

And, the net cash flow is shown below:

= Depreciation + incremental after tax income

where,

Depreciation equals to

= (Original cost - residual value) ÷ (useful life)

= ($260,000 - $10,000) ÷ (4 years)

= ($20,000) ÷ (4 years)  

= $62,500

And the incremental after tax income is $75,000

So, the net cash flow would equal to

= $62,500 + $75,000

= $137,500

So, the payback period would be

= $260,000 ÷ $137,500

= 1.89 years

For second case

The initial investment is $170,000

And, the net cash flow is shown below:

= Depreciation + incremental after tax income

where,

Depreciation equals to

= (Original cost - residual value) ÷ (useful life)

= ($170,000 - $14,000) ÷ (9 years)

= ($156,000) ÷ (9 years)  

= $17,333

And the incremental after tax income is $41,000

So, the net cash flow would equal to

= $17,333 + $41,000

= $58,333

So, the payback period would be

= $170,000 ÷ $58,333

= 2.91 years

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The following benefits a franchisee enjoys over <u>other small business owners</u> is:

  • <u>A. Franchises benefit from the successful marketing provided by franchisors.</u>
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A franchise is a business that operates by using the services of a franchisor who is in charge of <u>branding the company</u> and a franchisee who uses the name of the brand to do business and <u>pays a royalty fee</u>.

<em>Small business owners</em> are people who do the marketing, branding, packaging and sales by themselves <u>without necessarily involving the services of a marketer</u>.

Some of the benefits of a franchisee over <u>small business owners</u> are the facts that:

  1. They benefit from the successful marketing the franchisors provide
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  • Therefore, the correct answers are options A and D

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4 0
2 years ago
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Perkins Corp. will receive 250,000 Jordanian dinar (JOD) in 360 days. The current spot rate of the dinar is $1.48, while the 360
Evgesh-ka [11]

Answer:

$370,000

Explanation:

8 0
4 years ago
Mallard Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 4
KiRa [710]

Answer:

1. Cost per unit = 860,500/45000 units = $19.12

2. Mark up = 12% * 800,000 = $96,000/45000 units = $2.13

mark up = 2.13/19.12 = 11.14%

3. Therefore selling price per unit = $19.12+$2.13 = $21.25

Explanation:

Variable direct materials cost per unit............................ 5.50

Variable direct labor cost per unit.................................... 7.65

Variable factory overhead cost per unit .........................2.25

Variable selling and administrative cost per unit........... .90

TOTAL VARIABLE COST PER UNIT..................................16.3

TOTAL VARIABLE COST = $16.3*45000 units = $733,500

Fixed factory overhead cost $82,000

Fixed selling and administrative costs 45,000

TOTAL COST = $ 860,500

1. Cost per unit = 860,500/45000 units = $19.12

2. Mark up = 12% * 800,000 = $96,000/45000 units = $2.13

mark up = 2.13/19.12 = 11.14%

3. Therefore selling price per unit = $19.12+$2.13 = $21.25

5 0
3 years ago
The business structure you choose as a step for starting your new business affects the following?
pshichka [43]

Answer:

Define Yourself- Finding your Business Niche. Identify your interests and passions. Identify problems you can solve. Research your competition. ...

Test your idea.

Defining your Business – Branding. Identify your specific audience. Establish business processes.

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6 0
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Make or BuyBlasingham Company is currently manufacturing Part Q108, producing 35,000 units annually. The part is used in the pro
muminat

Explanation:

The computation is shown below:

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Direct Materials           $6

Direct Labor                  $2  

Variable Overhead  $1.5

Fixed Cost  ($77000 ÷ 35,000 units) $2.2

Total Cost per unit                                 $11.7

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1. He will buy the product as it is a saving of $0.7 ($11.7 - $11)

2) The most price willing to pay is $11.7

3) And, There is increase in income by $24,500 by multiply the 35,000 units with the $0.7 per unit in case of buying the part

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