Economists have determined that the economy goes through a cycle of

Rauch Inc. leases a piece of equipment to Donahue Corp. on Jan 1 2017. The lease agreement called for annual rental payments of

Eduardwww [97]

Answer:

Explanation:

1. Suppose the instead of $8,250, Rauch expects the residual value at the end of the lease to be $5,000, but Donahue agrees to guarantee a residual value of $8,250. All other facts being eqaul, how would Rauch change the amount of the annual rental payments, if at all?

A lower residual value means the car is expected to hold its value less (depreciate more) over the lease term.

Therefore, since most of the lease payment covers the cost of depreciation., more depreciation (or lower residual value) will most likely result into higher monthly payments over the lease term.

2. Explain how a fully guaranteed residual value by Donahue would change the accounting for Rauch, the lessor.

The financial accounting term guaranteed residual value has to do with an additional payment made by a lessee in property, cash, or both at the termination of the lease.

Therefore since Guaranteed residual values are financial commitments made by the lessee, they are factored into the calculation of the minimum lease payment.

3. Explain how a bargain renewal option for one extra year at the end of the lease term would change the accounting of the lease for Rauch, the lessor.

A bargain renewal option is a clause in a lease contract that gives the lessee the option of extension of the term of the lease at a substantially lower trate than the going market rate.

The presence of this clause in a lease contract will most likely imply that the lease will change to a finance lease rather than an operating lease

4 0

3 years ago

What is the name of the economic system where the government, or another central administration, regulates supply and prices?

MrMuchimi

It is called centrally-planned economy or command economy

5 0

4 years ago

Using the income statement for Times Mirror and Glass Co., compute the following ratios:

Umnica [9.8K]

Answer:

(A) Interest coverage charge ratio= 6.21

(B) Fixed charge coverage = 2.84

(C) Profit margin ratio= 8.57%

(D) Total assets turnover= 1.55

(E) Return on assets= 13.26%

Explanation:

(A) The Interest coverage charge ratio can be calculated as follows= EBIT/Interest expense

= 45,300/7,300

= 6.21

(B) The fixed charge coverage can be calculated as follows

= income before fixed charge + interest/fixed charges + interest

= 45,300+13,300/7,300+13,300

= 58,600/20,600

= 2.84

(C) The profit margin ratio can be calculated as follows

= Net income/sales × 100

= 22,800/266,000 × 100

=0.0857 × 100

= 8.57%

(D) The total assets turnover can be calculated as follows

= Sales/total assets

= 266,000/172,000

= 1.55

(E) The return on assets can be calculated as follows

= Net income/Total assets × 100

= 22,800/172,000 × 100

= 0.13255×100

= 13.26%

8 0

3 years ago

Each of the following transactions affects stockholders' equity except:________

attashe74 [19]

Answer:

C

Explanation:.

4 0

3 years ago

Read 2 more answers

Business behavior is derived in large part from the basic cultural environment in which the business operates and, as such, is s

solong [7]

Answer:

TRUE

Explanation:

The influence of cultural on business behavior is broadly encompassing. Cultural impacts ranges from understanding employee behavior and employees management methodologies; i.e. how best to manage employees based on their values and priorities. It also impacts the functional areas of marketing and distribution: what people appreciate and the peculiarities of their environment. It also greatly impact and is a strong determinant factor of success when a company is taking a decision on how best to enter a new market.

When business ignore cultural factors they are guilty of ethnocentrism and could be orchestrating business failure.

7 0

3 years ago