What is the concept of money?
A generally accepted medium for the exchange of goods and services, for measuring value, or for making payments. Many economists consider the amount of money and growth in the amount of money in an economy very influential in determining interest rates, inflation, and the level of economic activity.
How does the concept of money work?
Money is supposed to serve three main purposes: 1) a medium of exchange, 2) a store of value, 3) a unit of account. The exchange value of money equals the amount of goods and services it can be traded for at any given moment, popularly called its purchasing power.
Answer:
$83,333
Explanation:
The sales dollars level required to break even are: $83,333
Answer:
Option (A) is correct.
Explanation:
Given that,
Purchase of a new machine costing = $375,000
Company's desired rate of return = 6%
Present value factor for an annuity of $1 at interest of 6% for 5 years = 4.212
Since, the cash inflows are equal cash payback period:
= Initial investment ÷ Annual cash inflows
= $375,000 ÷ $93,750
= 4 years
Therefore, the cash payback period for this investment is 4 years.