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
Elena L [17]
3 years ago
15

Suppose a firm is considering the purchase of a machine which when used will increase its total revenues by $10,000 for the year

. The machine costs $8,000 and has a useful life of one year. The interest rate is 20 percent. This investment should:
Business
1 answer:
xz_007 [3.2K]3 years ago
6 0

Answer: Be undertaken because the rate of return is 5 percent greater than the interest rate

Explanation:

Given the following ;

Revenue increase = $10,000

Cost of machine = $8,000

Calculating the Rate of Return on the investment ;

FV = PV × (1 + r)^n

FV = Revenue increase = $10,000

PV = Cost of machine = $8000

n = period = 1 year

r = rate of return

$10000 = $8000 × (1 + r) ^1

1 + r = $10,000 ÷ $8,000

1 + r = 1.25

r = 1.25 - 1

r = 0.25 = 25 %

Interest rate = 20%

Rate of Return on investment = 25%

Rate of Return is 5% greater than interest rate

You might be interested in
Do you think it is possible for an outsider to accurately discern about the underlying cultural values of an organization by ana
Rudiy27

Answer:

From the given variables, an outsider might be able to understand roughly 35% of the organization's culture.

Explanation:

Culture is ultimately a state of mind, a mode of perception and a collective conscious.

Symbols, Ceremonies, dress and other observable aspects of culture reflects a certain degree of the internal culture, yet to understand it full, it is vital to observe the human behavior and the inter relationships within the organization.

Moreover, the power distance between ranks, distribution of authority and responsibilities, reward systems, means of communication and organizational goals  also influences  the culture within a company. These aspects are difficult for an outsider to see as they do not stay inside and get exposed to the internal environment of the organization.

5 0
4 years ago
What is "risk" and how can people reduce it through "risk shifting"?
lapo4ka [179]
Risk is the possibility of not getting expected result of something.
Risk shifting is one way of reducing risk. Best example for risk shifting is 'Insurance'. In this, risk is shifted to an another party like insurance company. After shifting risk to another party, if the shifted risk happened other party will gain that loss and you can claim the loss that happened because of the risk from other party. So if you have shifted your risk then you don't have to be afraid of getting that risk. Because another party is taking that risk for you but for a cost. 
3 0
3 years ago
Perteet Corporation's relevant range of activity is 5,100 units to 10,500 units. When it produces and sells 7,800 units, its ave
zaharov [31]

Answer:

Total overhead= $39,900

Explanation:

Giving the following information:

Variable manufacturing overhead $1.90

<u>First, we need to calculate the total fixed overhead:</u>

Total fixed overhead= 7,800*3.8

Total fixed overhead= $29,640

<u>Now, the total overhead for 5,400 units:</u>

Total variable overhead= 1.9*5,400= 10,260

Total fixed overhead= 29,640

Total overhead= $39,900

5 0
3 years ago
When the dollar "falls" compared to other currencies, which group benefits the most?
AURORKA [14]
<span>Foreign companies and investors benefit the most from a falling dollar. When the amount that a dollar can buy depreciates, it becomes more expensive, relatively, to purchase foreign goods. In addition and because of this depreciation, it also becomes relatively less expensive for foreign investors to purchase domestic goods, which means that foreign companies can buy more from US-based businesses.</span>
3 0
4 years ago
Read 2 more answers
Many routine business messages involve such things as teams coordinating their assignments, customers buying products, and colle
Eddi Din [679]

Answer:

d. requests.

Explanation:

Based on the scenario being described within the question it can be said that such messages are known as requests. These are technically messages from one member of a business to another member in order to ask for a certain good, service, or action to be taken by the second member. Such as attending a meeting or assigning an assignment.

4 0
4 years ago
Read 2 more answers
Other questions:
  • If a manager spends $3000 in Internet advertising that brings in 25 prospects before 2 leases were signed and spends $1000 on pr
    5·1 answer
  • Jerilyn is a 30% partner in the APJ Partnership when she sells her entire interest to Melly for $92,000 cash. At the time of the
    10·1 answer
  • The tuition per year for a local public university is $6,000, and you can commute from your parents' home. The tuition for an ou
    5·1 answer
  • An insurance agent’s files reveal the following facts about his policyholders: i) 243 own auto insurance. ii) 207 own homeowner
    15·1 answer
  • You collect 96 customer comment cards, 21 online surveys, and 43 surveys from people passing in front of your restaurant. What i
    12·1 answer
  • Why is what you say in a business as important as how you say it
    13·2 answers
  • Twelve years after Starfire's appearance, a similar coffee-shop chain, Reindeer Brews, entered the marketplace. Reindeer charges
    14·1 answer
  • Bovic Inc. is a growing company with sales of $1.25 million this year. The company expects to grow at an annual rate of 25 perce
    5·1 answer
  • What is your account balance after one year if you deposited 2000.00 earning 4% interest, compounded annually
    10·1 answer
  • Suppose the government increases spending to fund tuition assistance for qualified college students. automatic stabilizers will
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!