Most CLEP exams correspond to blank college courses

MC Qu. 90 A company is planning to purchase... A company is planning to purchase a machine that will cost $30,600 with a six-yea

faltersainse [42]

Answer:

Accounting rate of return = 20.53%

Explanation:

The accounting rate of return is the average annual income expressed as a percentage of the average investment.

The simple rate of return can be calculated using the two formula below:

Accounting rate of return

= Annual operating income/Average investment × 100

Average investment = (Initial cost + scrap value)/2

= 30,000/2= 15,000

Accounting rate of return = ( 3080/15,000) × 100 = 20.53%

Accounting rate of return = 20.53%

3 0

3 years ago

What is the primary reason that we have 3 branches

Alex_Xolod [135]

To keep every other branch in check if we had only one then they could go corrupt. (separation of power)

8 0

3 years ago

Your company, which has a MARR of 12%, is considering the following two investment alternatives:

mote1985 [20]

Answer:

future worth:

project A 11,615.26

project B 12,139.18‬

It should choose project B as their future value is greater

IRR of project A: 13.54%

We should remember that the IRR is the rate at which the net value is zero thus, equals the inflow with the cash outlay

It is calculate with excel or financial calculator due to the complex of the formula.

Explanation:

Project A

We calculate the future value of the cash flow per year and cost as we are asked for future value. The salvage value is already at the end of the project life so we don't adjust it.

Revenues future value

$C \times \frac{(1+r)^{time} -1}{rate} = FV\\$

C 15,000

time 8

rate 0.12

$15000 \times \frac{(1+0.12)^{8} -1}{0.12} = FV\\$

FV $184,495.3970

Expenses future value

$C \times \frac{(1+r)^{time} -1}{rate} = FV\\$

C 3,000

time 10

rate 0.12

$3000 \times \frac{(1+0.12)^{10} -1}{0.12} = FV\\$

FV $52,646.2052

Cost future value

$Principal \: (1+ r)^{time} = Amount$

Principal 40,000.00

time 10.00

rate 0.12000

$40000 \: (1+ 0.12)^{10} = Amount$

Amount 124,233.93

Net future worth:

-124,233.93 cost - 52,646.21 expenses + 184,495.40 revenues + 4,000 salvage value

future worth 11,615.26

Project B

cost:

$Principal \: (1+ r)^{time} = Amount$

Principal 60,000.00

time 10.00

rate 0.12000

$60000 \: (1+ 0.12)^{10} = Amount$

Amount 186,350.89

expenses 52,646.21 (same as previous)

revenues

$C \times \frac{(1+r)^{time} }{rate} = FV\\$

C 24,000

time 7

rate 0.12

$24000 \times \frac{(1+0.12)^{7} -1}{0.12} = FV\\$

FV $242,136.2815

TOTAL

242,136.28 + 9,000 - 52,646.21 - 186,350.89 = 12,139.18‬

Internal rate of return of project A

we write the time and cash flow for each period.

Time Cash flow

0 -40,000

1 -3,000

2 -3,000

3 12,000

4 12,000

5 12,000

6 12,000

7 12,000

8 12,000

9 12,000

10 16,000

IRR 13.54%

Then we write on excel the function =IRR(select the cashflow)

and we got the IRR of the project

6 0

3 years ago

Physical capital differs from raw materials in the sense that raw materials A. have a longer useful life in production B. are co

Komok [63]

Answer:

D. are used up in production

Explanation:

Raw materials can be seen as the "ingredients" required to produce a good and, thus, are consumable (used up in production). Physical capital refers to lasting goods that are assist the production process like buildings or machinery and are not consumable.

4 0

3 years ago

Mazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,

ella [17]

Answer:

a. $20.00

b. $28,75

Explanation:

Find the total incremental costs to satisfy the special order and add $2.00 profit (because we are aiming for a profit not to just break-even).

Calculation of Total Incremental Unit Costs

Direct materials $6 .00

Direct labor $4.00

Variable Overheads (2/3 × $9) $6.00

Shipping Cost $2.00

Total Incremental Unit Cost $18.00

Add Profit Element $2.00

Unit Selling Price for the Special Order $20.00

In this case no changes will occur on fixed overheads, hence it is irrelevant.

Calculation of Desired Net Operating Income

Sales ($28 × 160,000 units) $4,480,000

Less Product Costs :

Direct materials ($6 .00 × 160,000 units) ($960,000)

Direct labor ($4.00 × 160,000 units) ($640,000)

Variable Overheads ($6.00 × 160,000 units) ($960,000)

Fixed Overheads ($3.00 × 160,000 units) ($480,000)

Current Operating Income $1,440,000

Add Desired Increase in Operating Income $60,000

Desired Operating Income $1,500,000

Unit Profit = $1,500,000 ÷ 160,000 units

= $9.375

Unit Profit = Unit Selling Price - Total Unit Costs - Unit Incremental Profit

therefore,

Unit Selling Price = Unit Profit + Total Unit Costs + Unit Incremental Profit

= $9.375 + $19.00 + $0.375

= $28,75

5 0

3 years ago