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kogti [31]
3 years ago
9

A machine costs $600000 and is expected to yield an after tax net income of $23000 each year. Managment predicts this machine ha

s a 10 year service life and a $120000 salvage value, and it uses straight line depreciation. Compute this machine's accounting rate of return
Business
1 answer:
galina1969 [7]3 years ago
7 0

Answer:

6.39%

Explanation:

The cost of the machine is $600,000

The net income is $23,000

The management predict a that it has a 10 years service life

The salvage value is $120,000

The first step is to calculate the average investment

Average investment= (Cost of machine+Salvage value)/2

= $600,000+$120,000/2

= $720,000/2

= $360,000

Therefore, the accounting rate of return can be calculated as follows

= Annual net income/Average investment

= $23,000/$360,000

= 0.0639×100

= 6.39%

Hence the accounting rate of return is 6.39%

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The following are the transactions of Spotlighter, Inc., for the month of January:
coldgirl [10]

Answer:

Spotlighter, Inc.

Cash

Account Titles     Debit    Credit

Beginning balance $0

Notes Payable   $4,740

Common stock $5,430

Equipment                      $1,000

Supplies                          $1,100

Ending balance             $8,070

Notes Payable

Account Titles     Debit    Credit

Beginning balance $0

Cash                               $4,740

Equipment                        1,600

Ending balance  $6,340

Common stock

Account Titles     Debit    Credit

Beginning balance               $0

Cash                              $5,430

Equipment

Account Titles     Debit    Credit

Beginning balance $0

Cash                 $1,000

Notes Payable $1,600

Ending balance            $2,600

Supplies

Account Titles         Debit    Credit

Beginning balance $0

Cash                       $1,100

Accounts Payable $1,500

Ending balance                   $2,600

Accounts Payable

Account Titles     Debit    Credit

Beginning balance              $0

Supplies                        $1,500

Ending Balance $1,500

Explanation:

1) Data and Transaction Analysis:

a. Cash $4,740 Notes Payable $4,740

b. Cash $5,430 Common stock $5,430

c. Equipment $2,600 Cash $1,000 Notes Payable $1,600

d. Supplies $1,100 Cash $1,100

e. Supplies $1,500 Accounts Payable $1,500

6 0
3 years ago
In 2014, paxson incurred a net loss of $2,500. no dividends were declared or paid during 2014. what was paxson's retained earnin
tensa zangetsu [6.8K]

Paxson's retained earnings balance one year earlier on December 31, 2013 was $24,500.00

8 0
3 years ago
How many years are required for an investment to double in value if it is appreciating at the rate of 9​% compounded​ continuous
Vesna [10]

Answer:

time required is 7.70 years

Explanation:

given data

interest rate = 9%

solution

we know with the compounded​ continuously rate r and time t amount is

A(t) = A(o) e^{rt}     .................1

and we have given amount is double so

A(t) = 2 A(o)

so from equation 1 put the value and we get here

2 A(o) = A(o) e^{rt}

ln(2) = 0.09 t

solve it we get time

time t = 7.70 years

so time required is 7.70 years

7 0
3 years ago
When distributing a third party research report to its clients, an investment adviser (IA) must:
alexira [117]

Answer:

D.

Explanation:

When distributing a third party research report to its clients, an investment adviser (IA) must disclose that there was a third party involved that prepared the report. This is because disclosing the reports origin is absolutely necessary and required by law when the person that prepared the report is anyone but the investment adviser. Mostly due to the fact that the clients place their trust in the investment adviser and are trusting him/her with their money.

8 0
3 years ago
In which of the following areas would it cost the least amount of money to build a barn?
Nana76 [90]
The areas which will cost  the least amount of money to build a barn would be: Plains
Plains have the perfect amount of woods, water, and grass that will support the existence of a barn. Most barn animals cannot live in beach or mountains, so those options could be eliminated.
We need to spend more money to create space in forest if we want to build a barn there, so it could be eliminated too.

6 0
3 years ago
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