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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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yuradex [85]
There is an inflationary gap

I hope that helped
4 0
3 years ago
The Tree Top Airline​ (TTA) is a small​ feeder-freight line started with very limited capital to serve the independent petroleum
nikitadnepr [17]

Answer:

To make it feasible it will need to operate 7 or more planes.

Explanation:

450,000 maintenance facility

useful life of 15 year

salvage value of 100,000

<u>saving cost per plane:</u>

third party cost - own facility cost = cost savings

           35,000  -          25,000      =    10,000

present value of the salvage value: (present value of a lump sum)

\frac{salvage }{(1 + rate)^{time} } = PV  

salvage $ 100,000

time  15 years

Minimum accepter rate of return: 0.12000

\frac{100000}{(1 + 0.12)^{15} } = PV  

PV   18,269.6261

present worth of the facility:

450,000- 18,268.63 = 431,731.37

Now we determinate the PMT over a 15 years period to know the cost savings per year to justify the facility:

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV 431,731

time 15

rate 0.12

431731.37 \div \frac{1-(1+0.12)^{-15} }{0.12} = C\\

C  $ 63,388.630

As each plane cost savings are 10,000

63,388.62  / 10,000 = 6.39

the company will need to operate 7 or more planes.

3 0
3 years ago
Which of the following are examples of how everyday people use the skill of technology in their daily skills
Vitek1552 [10]

The sentence that depicts the examples of how everyday people use the skill of technology in their daily skills is option E. All of these are examples of how everyday people use the skill of technology in their daily skills

<h3>What is technology?</h3>

Technology is the result of compiled knowledge and application of skills, methods, and processes used in industrial production and scientific research. Technology is found in the operation of all machines, with or without detailed knowledge of their function, for the intended purpose of an organization.

Therefore the correct answer is option E. All of these are examples of how everyday people use the skill of technology in their daily skills

The complete question goes thus:

Which of the following are examples of how everyday people use the skill of technology in their daily skills

A. Paying bills online

B.Checking email on their phone

C.Scanning a transportation card on the subway

D.Taking this online class

E. All of these are examples of how everyday people use the skill of technology in their daily skills

learn more about technology: brainly.com/question/25110079

#SPJ1

6 0
2 years ago
According to the diathesis-stress model, if 100% of individuals with a genetic predisposition to a disorder actually display sym
ELEN [110]

Answer:Biological

Explanation:

The Diasthesis-stress model is a psychological theory which explains that peoples predisposition to stress can be affected by external causes of stress within the environment and thus, create a disorder. Some people are more prone to stressors compared to others. The biological behavioural approach is unaffected by the social, cultural, and environmental factors.

4 0
3 years ago
ranfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $42,0
Snowcat [4.5K]

Answer:

If discontinued, then their operating income will decrease by 168,800

It is a better deal to continue the backpack division active.

Explanation:

sales                  960,000

variable cost    (475,000)

contribution      485,000

fixed cost          (527,000)

loss                     (42,000)

if Dropped

40% of fixed cost are unavoidable

527,000 x 40% = (210,800)

Difference: 42,000-210,800 = (168,800)

5 0
3 years ago
Read 2 more answers
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