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grin007 [14]
3 years ago
11

Swift Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by

$130,000 and will increase annual expenses by $70,000 including depreciation. The oil well will cost $490,000 and will have a $10,000 salvage value at the end of its 10-year useful life. Calculate the annual rate of return. (Round answer to 2 decimal places, e.g. 12.47.)
Business
1 answer:
Dennis_Churaev [7]3 years ago
5 0

Answer: Annual rate of return = 24%.

Explanation:

Given that,

oil well will increase annual revenues by $130,000 and will increase annual expenses by $70,000 including depreciation

Cost of oil well = $490,000

$10,000 salvage value at the end of its 10-year useful life

Net Income = Annual revenue - annual expenses

= 130000 - 70000

= $60000

Average investment = \frac{490000+10000}{2}

= $250000

∴ Annual rate of return = \frac{Net\ Income}{Average\ Investment} \times 100

=  \frac{60000}{250000} \times 100

= 24%

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A company has preferred stock with a current market price of $18 per share. The preferred stock pays an annual dividend of 4% ba
scZoUnD [109]

Answer:

Answer:

Dividend (D) = 4% x $100 = $4

Current market price (Po) = $18

Flotation cost (FC) = $1.50

Tax rate (T) = 40% = 0.40

Kp =   <u> D </u>

       Po-FC

Kp =   <u>  $4 </u>

        $18-$1.50

Kp = <u>$4 </u>

      $16.5

Kp = 0.24 = 24%

Explanation:

Cost of preferred stock equals dividend divided by the difference between current market price and flotation cost. Cost of preferred stock is not tax deductible.

3 0
2 years ago
Suppose a large apartment complex is infested with cockroaches that have never been exposed to glucose-baited poison. a new tena
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<span>The success of the glucose-averse cockroaches in their new environment depends on the future use of glucose-baited poison in the apartment. If glucose-baited poison is not used, it is likely that the resident cockroaches will outcompete the new cockroaches, as the resident cockroaches will not exclude glucose-containing foods from their diet. However, the use of glucose-containing poison in the apartment will provide the new cockroaches a distinct selective advantage, as they will survive to reproduce, whereas the majority of the resident cockroaches will die.</span>
7 0
3 years ago
You have $1,000,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 18 percent and Stock Y w
pogonyaev

Answer:

D. $375,000

Explanation:

Expected return of 13% for $1,000,000 will be $130,000

If we invest $375,000 in Stock X, our expected return based on 18% will be $ 67,500 and the remaining $625,000 will be invested in Stock X, therefore expected return based on 10% will be $ 62,500 and thereby giving the total return of $130,000 which is 13% of $1,000,000 and hence $375,000 will be invested in Stock X

8 0
2 years ago
Robert and Jenny are coworkers who enjoy flirting with each other while at work. They both view their actions as harmless fun, a
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Answer:

The correct answer is letter "A": True.

Explanation:

Sexual harassment in the work field does not only involve the fact of one individual chasing another for sexual purposes. It also implies any other set of intimacy activities that can bother others at work such as couples flirting. Most jobs, do not allow sentimental relationships within the work-frame. Some even fire employees found in relationships at work.

Thus, if one of Jenny and Robert's coworkers feel uncomfortable for their flirting,<em> they can be guilty of sexual harassment</em>.

4 0
3 years ago
Miley, a single taxpayer, plans on reporting $31,375 of taxable income this year (all of her income is from a part-time job). Sh
notsponge [240]

<u>Answer:</u>$1,825

<u>Explanation:</u>

Based on the single tax rate schedule, of the additional $10,900 of taxable income, $9,000 is taxed at 15% (the increase $31,375 to $42,275) and the remaining $1,900 ($38,650 minus $37,650) is taxed at 25%. To summarize, ($9,000 × 15%) + ($1,900 × 25%)

= $1,350+$475

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The income tax from second job increases her tax liability by $1,825.

7 0
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