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Vesnalui [34]
3 years ago
12

Longordia Foods is expecting to generate after-tax income of $1,558,888, $2,933,312, and $3,261,712 for each of the next three y

ears. The equipment used will have an average book value of $8,375,000 over that period. What is the accounting rate of return (ARR)?
Business
1 answer:
Digiron [165]3 years ago
6 0

Answer:

30.86%

Explanation:

It is a financial ratio used for the capital budgeting. It is the ratio of the average return generated by the capital asset and the its average book value in the given period.

Formula for ARR is as follow

ARR = Average Net Income  / Average Investment

Average Net Income = ( $1,558,888 + $2,933,312 + $3,261,712 ) / 3

Average Net Income = $2,584,637

Average Investment = $8,375,000

Placing values in the formula

ARR = $2,584,637 / $8,375,000

ARR = 0.3086 = 30.86%

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Using a large value for order k in the moving averages method is effective in
Masteriza [31]

Answer:

The correct answer is A that is smoothing out the random fluctuations.

Explanation:

The higher values of K states the greater number of the values which need to be consider for forecasting.

When consider or taking the larger or the higher value of the irregular fluctuation which could be decreased or reduced.

And as a consequence, the large value of K will be used for smoothing of the random fluctuations.

Therefore, the right answer is smoothing of the random fluctuations.

4 0
3 years ago
21. WHAT DOES IT MEAN TO "EMPATHIZE" WITH A GUEST?
Jobisdone [24]

Answer:

When a guest is complaining, emotions will be involved. The empathetic staff member will listen to the guest carefully, not simply offering sympathy

4 0
3 years ago
Wilbert's Clothing Stores just paid a $1.20 annual dividend and increases its dividend by 2.5 percent annually. You would like t
astraxan [27]

Answer:

For 100 shares, the mount that should be paid = $1766

Explanation:

We have to calculate the price of the stock in the 4th year because the investor cannot afford the stock in another 3 years.

Price of the stock = Do + g / ke - g

Dividend in current year = $1.2

Dividend after 1 year = 1.2 +2.5% (1.2)= 1.23

Dividend after 2 years = 1.23 + 2.5%(1.23) = 1.26075

Dividend after 3 years = 1.26075 + 2.5%(1.26) = 1.29227

Price in 4th year = 1.29227 + 2.5% / (0.10 - 0.025)

                            =1.29227 + 2.5%(1.29227)/0.075

                            = 17.66

Therefore, for 100 shares, the mount that should be paid = 17.66 * 100 = $1766

5 0
3 years ago
Read 2 more answers
You are working at the campus bookstore, earning $9.00 per hour. Your manager tells you that in the upcoming year, you will get
Anastaziya [24]

Answer:

a. $0.09

b. $0

c. -$0.09

Explanation:

Real rate = Nominal rate - inflation rate

a. Real rate = 2% - 1%

= 1%

Change in real wage = 9 * 1% = $0.09

b. = 2% -2% = 0%

Change in real wage = 9 * 0% = 0

c. = 2% - 3%

= -1%

Change in real wage = 9 * -1% = -$0.09

8 0
3 years ago
A common stock pays an annual dividend per share of $1.80. The risk-free rate is 5%, and the risk premium for this stock is 4%.
ArbitrLikvidat [17]

Answer:

The value of the stock today is $20

Explanation:

Using the CAPM equation, we first calculate the required rate of retunr on the stock.

The equation for CAPM is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the risk premium on market
  • Beta * rpM is the risk premium on stock

r = 0.05 + 0.04

r = 0.09 or 9%

The value of the stock can be calculated using the zero growth model of DDM. The DDM values the stock based on the present value of the expected future dividends from the stock. As the dividend from the stock is expected to remain constant through out to an indefinite period, the value of the stock today is,

P0 = Dividend / r

P0 = 1.8 / 0.09

P0 = $20

3 0
3 years ago
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