1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Rom4ik [11]
3 years ago
5

Exercise 16-12 Determining the payback period LO 16-4 Fanning Airline Company is considering expanding its territory. The compan

y has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $23,100,000; it will enable the company to increase its annual cash inflow by $6,600,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $32,000,000; it will enable the company to increase annual cash flow by $8,000,000 per year. This plane has an eight-year useful life and a zero salvage value. Required Determine the payback period for each investment alternative and identify the alternative Fanning should accept if the decision is based on the payback approach. (Round your answers to 1 decimal place.)
Business
1 answer:
neonofarm [45]3 years ago
5 0

Answer:

First plane = 3.5 years

Second plane = 4 years

The first plane should be chosen.

Explanation:

Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.

Payback period = Cost/ annual cash flows

For the first plane: $23,100,000 / 6,600,000 = 3.5 years

For the second plane = $32,000,000 / $8.000,000 = 4 years

Using the cash payback period, the plane with the shorter payback period would be chosen. So the first plane would be chosen.

I hope my answer helps you

You might be interested in
Which of the following statements is true of workbench memory? a. It has unlimited duration. b. Its capacity remains the same ac
Setler [38]

Answer:

E) It has limited capacity.

Explanation:

Our brain's workbench memory stores and encodes information so that it can  be stored as long-term memory, and eventually it can be retrieved and used in the future. Since it is something like an intermediate stage, it has limited capacity. The events that are held there and not stored in our long-term memory will be discarded.

3 0
3 years ago
N organization's hierarchy of authority refers to an organization's _____.
lara31 [8.8K]

commenting so I can get help too


3 0
4 years ago
Radar Company sells bikes for $490 each. The company currently sells 4,300 bikes per year and could make as many as 4,620 bikes
Karo-lina-s [1.5K]

Answer:

Radar's additional income for accepting the order is calculated as follows:

Sales - 320 x $460 = $147,200

less Cost of Sales = 320 x $180 + $48,000 = $105,600

Additional Income = $41,600

Explanation:

The additional income of $41,600 is $147,200 - $105,600, which is the result of deducting cost of sales from Sales.

The cost of sales includes the variable cost per bike, including the incremental fixed costs ($48,000) to make this order.

To make a decision whether to accept an order or not, the company needs to consider all variable costs, including the incremental fixed costs.  The resulting additional income is what is available to offset the fixed costs.

8 0
3 years ago
A planning budget called for 500 units to be produced and total direct labor cost of $7,500. Actual production was 600 units and
boyakko [2]

Spending variance is 300 Unfavourable.

SR = 7500 / 500 = 15

AR = 9300 / 600 = 15.5

Spending variance = (SR - AR ) AH

= (15 - 15.5 ) 600

= 300 Unfavourable.

Spending variance, also known as rate variance, is the difference between the actual amount of an expense and the budgeted amount. If you have a utility bill of $250 in January and you expect to incur an expense of $150, you have an unfavorable expense variance of $100.

Spending variance is the difference between the actual amount of an expense and the expected (or budgeted) amount. So if a company has spent $500 on utilities in January and plans to spend $400, the result is a $100 unwanted spending difference.

There are many variations in calculating the spending variance for different types of expenses, but the basic formula for this calculation is:

1) Actual Cost - Expected Cost = Expense Variance.

2) (Actual Variable Burden Rate - Projected Variable Burden Rate) x Work Hours = Variable Burden Cost Variance.

Learn more about Spending variance here: brainly.com/question/26082424

#SPJ4

7 0
2 years ago
Racine started a new business in the current year. She incurred $52,000 of start-up costs. If her business started on November 2
Lerok [7]

Answer:

$3,544

Explanation:

The maximum immediate expenses amount of $5000 phases out for dollar if more than $50,000 of start-up cost are incurred. Thus, the immediate expensing is  $3,000

   ($5000 - ($52,000 - $50,000))

∴ ($5000 - ($2000) = $3000

The amortization is $544

($49,000/180) × 2 months

= $544

The total amount she may deduct = $3000 + $544 = $3544.

3 0
4 years ago
Other questions:
  • Fox Co. reported a retained earnings balance of $800,000 at December 31, 20x1. In August 20x2, Fox determined that insurance pre
    12·1 answer
  • Jason is the new manager of a local retail store. He is in charge of all the activities that take place at the store. During the
    12·1 answer
  • At ABC Co., sales revenue is $170,000 when it spends $5000 on advertising. Sales revenue is $254,000 when $12,000 is spent on ad
    10·1 answer
  • A marketing _________ is one way of visually presenting relevant marketing information to a manager.
    11·1 answer
  • Which of the following is a communication tool that can be used to strengthen a salesperson's presentation? A. testimonial B. th
    12·1 answer
  • Which one of the following is a capital structure decision?
    12·1 answer
  • Is a general decline in prices throughout an economy
    15·1 answer
  • During the busiest season of the year, your customer support center receives a higher call volume than planned. However, you can
    9·1 answer
  • A travel agent is able to offer a client a 15 percent discount on a luxury hotel suite that normally
    11·1 answer
  • Fidelity bonds insure
    8·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!