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
loris [4]
3 years ago
5

Ten years ago, Jacobson Recovery purchased a wrecker for $285,000 to move disabled 18-wheelers. He anticipated a salvage value o

f $50,000 10 years after the initial purchase. During this time his average annual revenue totaled $52,000. (a) Was his investment economically justified at a 12% discount rate
Business
1 answer:
expeople1 [14]3 years ago
7 0

Answer:

NPV    =  $24,910.26  

The investment is economically justified because it increases the wealth pg Jacobson Recovery by   $24,910.26

Explanation:

To determine whether the investment is justifiable we will compute the the Net present Value of the project

The Net present value (NPV) is the difference between the Present value (PV) of cash inflows and the PV of cash outflows. A positive NPV implies a good and profitable investment project and a negative figure implies the opposite.  

NPV = PV of cash inflows - PV of cash outflows  

<em />

<em>PV of cash  average revenue = A × (1-(1+r)^(-n))/r</em>

A- average revenue, r- discount ate- 12% , n- number of years- 10

PV of reveue = 52,000 × (1-(1.12)^(-10)/0.12= $293,811.60

<em>PV of salvage value = F × (1+r</em><em>)</em><em>^(-n)</em>

                                 = 50,000 × 1.12^(-10)

                                  = 16,098.66183

NPV = $293,811.60 + 16,098.66183  - $285,000

         =  $24,910.26  

You might be interested in
Predetermined overhead rates in traditional costing are often based on
sp2606 [1]

Answer:

a) direct labor cost for job order costing and machine hours for process costing.

Explanation:

As we know that the predetermined overhead rate is the rate which is to be computed by considering the total estimated manufacturing overhead cost and the estimated activity level i.e machine hours, etc

Under the traditional costing, in case of job order costing it ts based on direct labor cost while in the process costing it is based on machine hours

Hence, first option is correct

3 0
3 years ago
How much do alcohol related crashes cost Florida every year
maksim [4K]

Explanation:

Total more than $44 million

hope it is helpful to you

8 0
3 years ago
Read 2 more answers
Suppose that Larry, an economist from a business school in Georgia, and Megan, an economist from a nonprofit organization on the
iVinArrow [24]
Where is the dialogue? :)
3 0
2 years ago
Question 7 (Multiple Choice Worth 4 points)
Stolb23 [73]

In a situation wherein Country Y has a progressive tax system for income, with no credits or deductions, a CEO earning $2.5 million per year would pay the most as a percentage of income in the country Y. Therefore, the option D holds true.

<h3>What is the significance of a progressive tax system?</h3>

A progressive tax system can be referred to or considered as a system wherein the percentage of tax to be levied increases with an increase in the total taxable income for an individual. The rates of taxation under this system are defined under percentage.

In the situation given above, when a CEO in country Y earns $2.5 million, i.e., more than any other person mentioned above, he will be the one who will have to pay the most taxes as a part of percentage of his income.

Therefore, the option D holds true and states regarding the significance of the progressive tax system.

Learn more about progressive tax system here:

brainly.com/question/12416177

#SPJ2

4 0
1 year ago
Read 2 more answers
During 2004 Elway Corporation transferred inventory to Howell Corporation and agreed to repurchase the merchandise early in 2005
Svet_ta [14]

Answer:

d. Product financing arrangement.

Explanation:

A business transaction in which an organization sells and agrees to repurchase inventory with the repurchase price equal to the initial or original sales price plus the carrying and financing costs is known as the Product financing arrangement.

A product financing arrangement is more likely to exist when the seller commits to having a third party client purchase the item and then agrees to repurchase the item from the third party client.

It's noteworthy to know, that the seller controls how the item sold under either of the above mentioned situations is analysed and disposed of.

6 0
3 years ago
Other questions:
  • Using the allocation method, if the ratio of land value to building value is one to three and an improved property is valued at
    5·1 answer
  • The average of all prices in the economy is the
    9·1 answer
  • Suppose the following information was taken from the 2014 financial statements of FedEx Corporation, a major global transportati
    7·2 answers
  • What are some natural conditions of a housing site that influence the dwelling that sits on it? Help ASAP!
    12·1 answer
  • Discuss the likely drawback to a start up business of setting up and running as a franchise operation
    12·1 answer
  • Indirect channels for consumer goods
    6·1 answer
  • Sam was injured in an accident, and the insurance company has offered him the choice of $49,000 per year for 15 years, with the
    6·1 answer
  • Todays electronics specializes in manufacturing modern electronic components. It also builds the equipment that produces the com
    12·1 answer
  • A product's price will increase the most if:
    6·1 answer
  • The 20/60/20 rule states that the total percent of employees who might be influenced to commit a fraudulent act is:__________
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!