Answer:
Based on the profitability index method, the investment should not be accepted.
It does not produce enough cash flows to justify the investment.
Explanation:
The profitability index method measures the present value of benefits for by dividing the present value of benefits by the present of initial investments.
The present value of initial investment in this project remains RM400,000. The present value of incremental annual cash flows of RM80,000 after taxes for 5 years will be equal to:
RM80,000 * 3.668 = RM293,440
Then the next step is to divide the present value of benefits by the initial investment as follows:
RM293,440/RM400,000 = 0.7336 = 73.36%
The implication is that the present value of the benefits is less than the initial investment costs. The project should then be rejected.
Answer:
Dam are u ok if there is anything u need let me kmow
Explanation:
Answer:
12%
Explanation:
Calculation for the division's return on investment
Using this formula
Return On Investment = Operating income /Average total assets
Let plug in the formula
Return on investment= $636,000/$5,300,000
Return on investment= 0.12*100
Return on investment=12%
Therefore the division's return on investment will be $12%
Answer:
b) Debit Cash $7,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000.
Explanation:
When shares are issued and paid for, the entries required are debit to cash account and a credit to common stock. However, when the amount received is higher than the par value of the stock issued, the excess received is recorded as a share premium or Paid-in Capital in Excess of Par Value.
As such, where the par value is $100 and 60 shares were issued, value of common stock issued
= $100 * 60
= $6,000
Paid-in Capital in Excess of Par Value = $7,000 - $6,000
= $1,000
Answer:
$6.30
Explanation:
For computing the unit price, first we have to determine the difference in cost which is shown below:
= $150,000 - $120,000
= $30,000
Now the break even price would be
= Variable cost + cost difference
= $600,000 + $30,000
= $630,000
So, the unit price would be
= Break even price ÷ number of unit produced
= $630,000 ÷ 100,000 units
= $6.30
