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Westkost [7]
3 years ago
10

Major Corp. is considering the purchase of a new machine for $5,000 that will have an estimated useful life of 5 years and no sa

lvage value. The machine will increase Major’s after-tax cash flow by $2,000 annually for 5 years. Major uses the straight-line method of depreciation and has an incremental borrowing rate of 10%. The present value factors for 10% are as follows:Using the payback method, how many years will it take to pay back Major’s initial investment in the machine?
Business
1 answer:
Yuri [45]3 years ago
3 0

Answer:

2.5 years

Explanation:

The payback method calculates how many years it will take the company to recover the investment's cost without considering any discount rate. The formula sued to calculate the payback period is:

payback period = investment cost / annual cash flow

payback period = $5,000 / $2,000 = 2.5

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Crane Company purchased land as a factory site for $1300000. Crane paid $110000 to tear down two buildings on the land. Salvage
Marizza181 [45]

Answer:

a. $‭1,420,000‬

b.  $‭4,514,800‬

Explanation:

When it comes to fixed assets, all costs that directly helped make the asset available for use are to be capitalized.

Cost of Land

= Purchase Value + Cost Incurred to Tear Down 2 Buildings + Legal Fees + Title Insurance Cost + Assessment Cost - Salvage

= 1,300,000 + 110,000 + 5,000 + 3,500 + 9,500 - 8,000

= $‭1,420,000‬

Cost of Building

= Architect's Fees + Liability Insurance Cost + Excavation Cost + Contractor's Payment + Interest Cost

= 46,000 + 3,800 + 15,000 + 4,200,000 + 250,000

= $‭4,514,800‬

4 0
3 years ago
The FDA supervises standards of quality and consistency of drugs today. <br><br> True <br> False
Soloha48 [4]
True. Hope this helps!
7 0
3 years ago
A stadium estimates its administrative costs for three sponsorships to be $12,000, $27,000, and $63,000. Revenue from the sponso
Gemiola [76]

The correct answer is $148,000

6 0
3 years ago
Read 2 more answers
On January 1 of this year, Barnett Corporation sold bonds with a face value of $ 500,000 and a coupon rate of 7 percent. The bon
adoni [48]

Case-A              

par value of bonds   500000        

The stated rate of interest 7%        

The market rate of interest 7%        

As stated and the market rate of interest is equal, the bonds are issued at par value.

Therefore,            

Cash received from issuance of bonds   500000    

Interest expense (500000*7%)     35000    

Cash paid for interest in Year-1     35000    

Cash paid fat Maturity     500000

A market economic system is a monetary gadget where forces, called supply and demand, direct the production of goods and services. marketplace economies aren't managed through a government (like a central authority) and are instead based on voluntary exchange.

A market economic system is a financial machine in which the choices concerning investment, production, and distribution to the clients are guided with the aid of the fee indicators created with the aid of the forces of delivering and call for, wherein all suppliers and purchasers are unimpeded by way of charge controls or restrictions on contract freedom.

A marketplace is defined because of the sum general of all the buyers and dealers inside the region or area below consideration. The vicinity may be the earth, or international locations, regions, states, or cities. The cost, value, and charge of gadgets traded are as consistent with forces of delivery and demand in a marketplace.

Learn more about market here brainly.com/question/906651

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6 0
1 year ago
Multiple Choice Question Mahan Corporation expects total sales to increase by 20% over the next year. The corporation has no spa
AlekseyPX

Answer:

$48,000

Explanation:

The computation of the corporation debt is shown below:

Since the asset is increased by 20%

The present asset is $100,000

ANd, the increased assets is

= $100,000 + $100,000 × 0.20

= $100,000 + $20,000

= $120,000

Now the debt is

= $120,000 × 0.4

= $48,000

hence, the last option is correct

3 0
2 years ago
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