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Over [174]
3 years ago
11

(Ignore income taxes in this problem.) Clairmont Corporation is considering the purchase of a machine that would cost $150,000 a

nd would last for 5 years. At the end of 5 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $37,000. The company requires a minimum pretax return of 12% on all investment projects.
The present value of the annual cost savings of $37,000 is closest to:________.
a) $133,385
b) $235,070
c) $185,000
d) $20,979
Business
1 answer:
djverab [1.8K]3 years ago
4 0

Answer:

a) $133,385 

Explanation:

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator:

Present value each year from year 1 to 5 = $37,000

I = 12%

NPV = $133,385 

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

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Above each column is a statement about the Federal Reserve. Place each misconception about the Fed listed below in the column wi
maw [93]

Answer:

1. The Fed is an independent government agency  ⇒ C. A government agency should not have so much control over the economy because politicians are always going to do anything to win the next election.

The Fed is an independent government agency that pursues the best economic policy for the nation independent of what politicians want.

2. The Fed is overseen by the federal government  ⇒ A. The Federal Reserve lacks accountability because no one audits the Fed. There is no way to know what really goes on behind the scenes.

The Federal government however, gets to oversee the Fed to ensure accountability and best practices.

3. The Fed conducts monetary policy through open market operations ⇒ B. The Federal Reserve just prints more money when the economy needs it and gives it to link.

The Fed does not only oversee the printing of money by the Treasury, they also conduct monetary policy through the use of OMO by buying securities when they want money supply to increase and selling when they want a decrease.

4 0
3 years ago
Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs
alekssr [168]

Answer:

As overhead was underapplied, the balance in overhead will be $33,000 credit.

Explanation:

<u>First, we need to calculate the predetermined overhead rate:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 452,000 / 2,260,000

Predetermined manufacturing overhead rate= $0.2 per direct labor dollar

<u>Now, we can allocate costs:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 0.2*1,930,000

Allocated MOH= $386,000

<u>Finally, we determine the over/under allocation:</u>

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead=  419,000 - 386,000

Underapplied overhead= $33,000

As overhead was underapplied, the balance in overhead will be $33,000 credit.

8 0
2 years ago
What type of company can list and trade shares on the stock exchange?
Y_Kistochka [10]

The stock exchanges promote the orderly trading of stock shares of the companies that choose to list their shares with the different exchanges. There are over 5,000 companies listed on the two major U.S. stock exchanges: the New York Stock Exchange and the NASDAQ stock exchange.

hope this helps

5 0
3 years ago
Zoe's Bakery operates in a perfectly competitive industry. Suppose that when the market price is $5, the profit-maximizing outpu
Katena32 [7]

Answer:

(D) $5; $150

Explanation:

MR=MC, marginal cost is the market price, which is 5$.

And she is making a dollar per based on the average total cost;

so selling 150 =$1 ×150

= $150 .

7 0
3 years ago
A 1-year gold futures contract is selling for $1,645. Spot gold prices are $1,592 and the 1-year risk-free rate is 3%. Based on
kodGreya [7K]

Answer:

A. Buy gold in the spot with borrowed money, and sell the futures contract.

Explanation:

A futures contract is an agreement to buy or sell an asset at a future date at an agreed-upon price while arbitrage is the simultaneous purchase and sale of identical goods or securities that are trading at disparate prices. There is opportunity for riskless profit in arbitrage because of the exploitation of price disparities.

Based on the above definitions, buying gold in the spot with borrowed money, and selling the futures contract since it is overpriced will yield positive riskless arbitrage profits.

7 0
3 years ago
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