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xz_007 [3.2K]
3 years ago
12

The management at Dime Corporation is investigating purchasing equipment that would increase sales revenues by $527,000 per year

and cash operating expenses by $339,800 per year. The equipment would cost $425,000 and have a 10 year life with no salvage value. Dime Corporation uses straight-line depreciation for all fixed assets. The simple rate of return on the investment is closest to (ignore income taxes): A. 44.05% B. 54.05% C. 27.46% D. 34.05%
Business
1 answer:
Contact [7]3 years ago
5 0

Answer:

option (D) : 34.05%

Explanation:

As per the data given in the question,

Computation of Simple rate of return :

Investment = $425,000

Depreciation = (Initial cost - salvage value) ÷ useful life

= ($425,000 - 0) ÷ 10

= $42,500

Net profit = Sales revenue - cash operating expense - Depreciation

= $527,000-$339,800-$42,500

= $144,700

Simple rate of return = Net Profit ÷ Investment

= $144,700 ÷ $425,000

= 34.05%

Hence, option (D) is correct answer

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3 years ago
Interest is the rate earned from a <br> stock share <br> savings account <br> deposit <br> loan
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Explanation:

Interest is the money earned when deposits or savings stay in a financial institution for some time. Financial institutions such as commercial banks pay interests to encourage the public to save and keep deposits in their bank accounts. Interest earned is determined by the amount of deposit or saving, the interest rate offered, and the duration of time the money stayed in the bank.

A high-interest rate is attractive to the public as it earns more interest. Financial institutions compete for deposits and saving by offering better interest rates.

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3 years ago
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andreev551 [17]

Answer:

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Explanation:

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Price of the stock today = \frac{16}{(1+0.16)^1}+\frac{12}{(1+0.16)^2}+\frac{11}{(1+0.16)^3}+\frac{7.50}{(1+0.16)^4}+\frac{7.50(1.06)}{(0.16-0.06)(1+0.16)^4} = $77.81

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3 years ago
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Answer:

Correct answer is D $7300

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