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
Olenka [21]
3 years ago
9

Suppose a handbill publisher can buy a new duplicating machine for $500 and the duplicator has a 1-year life. The machine is exp

ected to contribute $550 to the year’s net revenue.
What is the expected rate of return?

If the real interest rate at which funds can be borrowed to purchase the machine is 8 percent, will the publisher choose to invest in the machine?

Will it invest in the machine if the real interest rate is 9 percent? If it is 11 percent?
Business
1 answer:
spayn [35]3 years ago
3 0

Answer & Explanation:

Step 1

The expected rate of return r is calculated as follows:

r = (expected revenue - cost / cost) * 100%

= (550 - 500 / 500) * 100%

=10%

Step 2

The publisher will choose to invest the machine when the real interest rate is 10% and 9%. When the expected rate of return is higher than the cost of borrowing, that is, the real interest rate, the investment is profitable and should be undertaken.

In this question, the expected rate of return is 10%, higher than the borrowing cost of 8% and 9%; thus, the investment of the new machine should be undertaken.

When the cost of borrowing is 11%, which is higher than the rate of return of 10%, the investment should not be undertaken.

You might be interested in
Which early farming tool removed the stalk and the grain from a husk of wheat? sickle scythe thresher mouldboard plow
tankabanditka [31]
A sickle because it was used during the Industrial Revolution
8 0
3 years ago
Read 2 more answers
You are choosing between these four investments and you want to be​ 95% certain that you do not lose more than 8.00 % on your in
MakcuM [25]

Answer:

option B

Explanation:

In other to know how return fluctuation can be predicted with for instance, x%, predictability, one has to look at the normal distribution curve of return (average returns) to standard deviation of those returns. (check the attached file for additional details).

Hence, to be 95% sure that investment losses are less than 8% one needs to look at 95% of all returns which infact Mean return plos or minus 20. If the lower bound of this interval is less than 8% then the investment needs to be selected

check attached file for additional details

8 0
3 years ago
A company purchased equipment valued at $120,000. It traded in old equipment for a $95,000 trade-in allowance and the company pa
Zepler [3.9K]

Answer:

$120,000

Explanation:

Data provided in the question

Purchase value of an equipment = $120,000

Trade in allowance = $95,000

Paid cash = $25,000

Cost of an old equipment = $110,000

Accumulated depreciation = $33,000

So by considering the above situation, the recorded value of the equipment is $120,000 as the cash is paid for $25,000 and the trade in allowance is $95,000

So it would be equal to the purchase value i.e $120,000

8 0
3 years ago
For a natural monopoly to exist
vfiekz [6]

Answer:

The correct answer is A

Explanation:

Natural monopoly is the kind of monopoly which exists because of the high start up costs as well as the powerful economies of scale for conducting or performing a business in a particular industry.

And for this type of monopoly to exist , a firm or business need that the long run average cost curve will exhibit the economies of scale by the relevant range of the market demand.

3 0
3 years ago
If a potential Latin American customer insists on giving you a tour of the architectural highlights of his city prior to discuss
timama [110]

Answer: The answer is HIGH CONTEXT Culture.

Explanation: High context culture refers to an implicit communication and nonverbal clues. It is a situation whereby a lot of unspoken communication is implicitly transferred during a communication.

In a high context culture, communication that has underlying context and meaning in the message is used. It goes beyond the spoken words but relies on the tone of the message.

A tour round a potential customers high class environment gives a clue of a high context culture as the customer is not verbal stating he is wealthy but implying it non verbally.

5 0
3 years ago
Other questions:
  • 3. What is meant by economy of scale? Why would costs be im pacted by the quantity of garment that is produced?
    11·1 answer
  • Mr. hanson is strongly suspected of embezzling money from his employer. he has denied the allegation. to determine whether he is
    9·1 answer
  • Âa black box does not want or need outside interference. true or false
    15·1 answer
  • Plastics net, hospital network.com, textile web, and ebay business are all examples of
    12·1 answer
  • How can businesses addressing unemployment?
    9·1 answer
  • A hospital's permanent accounting department and customer service department are examples of
    12·1 answer
  • Accountability within an organization allows managers to operate independently from the rest of the organization. flows downward
    11·1 answer
  • On January 2, 2020, All Good Company purchased 6,000 shares of the stock of Big Bad Company, and DID obtain significant influenc
    9·1 answer
  • What term refers to the inherent value of the product in the marketplace?
    15·1 answer
  • the purpose of tracing a sample of inventory tags to a client's computerized listing of inventory items is to determine whether
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!