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agasfer [191]
3 years ago
7

Laredo Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $120,000. The frei

ght and installation costs for the equipment are $1,500. If purchased, annual repairs and maintenance are estimated to be $2,200 per year over the six-year useful life of the equipment. Alternatively, Laredo Corporation can lease the equipment from a domestic supplier for $25,000 per year for six years, with no additional costs.Prepare a differential analysis dated March 15 to determine whether Laredo Corporation should lease (Alternative 1) or purchase (Alternative 2) the equipment.
Business
1 answer:
Rina8888 [55]3 years ago
8 0

Answer:

It is cheaper for Laredo to purchase the machine as he saves a sum of  $15,300 through it.

Explanation:

Differential analysis is a system of evaluating the cost and benefits that would arise from alternative solutions to the same problems. The analysis of different options towards a decision making in order to arrive at the best option

Cost of Purchase.

Initial cost  - $120,000

Freight & Installation - $ 1500

Repair & Maintenance - $2200 *6 - $13200

Total -$134,700

Cost of lease = $25,000*6=$150,000

It is cheaper for Laredo to purchase the machine as he saves a sum of  $15,300 through it.

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An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a
Doss [256]

Answer:

The value of the policy assuming the proposed rates is 142,769.63

Explanation:

Time line:

<--/--/--/--/--/--/----------------------------------------------------------//-->

We have 6 payment and then, a lump sum capitalize until age 65

First we calculatethe value up to the end of the six year:

Principal \: (1+ r)^{time} = Amount

First year:

940 \: (1+ 0.09)^{6} = Amount

Amount 1,576.47

Second year:

940 \: (1+ 0.09)^{5} = Amount

Amount 1,446.31

Third Year:

1040 \: (1+ 0.09)^{4} = Amount

Amount 1,468.04

Fourth year:

1040 \: (1+ 0.09)^{3} = Amount

Amount 1,346.83

Fifth year:

1140 \: (1+ 0.09)^{2} = Amount

Amount 1,354.43

Six year:

1140 \: (1+ 0.09)^{1} = Amount

Amount 1,242.60

Sum at the end of the six year: 7,080.25‬

<u>Then this capitalize up to 65 birthday:</u>

from the seventh birthday up to the 65th birthday

65 - 7 = 58 years

Principal \: (1+ r)^{time} = Amount

Principal 8,426.68

time 58.00

rate 0.05000

8426.68 \: (1+ 0.05)^{58} = Amount

Amount 142,769.63

3 0
3 years ago
He business decisions of a corporation are made by whom?
Sauron [17]
C. A board of directors :)
6 0
2 years ago
_______ is a great way to broaden or narrow your search.
natulia [17]
D asking your instructor to assign you a topic
5 0
3 years ago
Read 2 more answers
g if 1 British pound can be exchanged for 180 cents of U.S. currency, what fraction should be used to compute the indirect quota
Mrrafil [7]

Answer: 1/1.8

Explanation:

From the question, we are informed that 1 British pound can be exchanged for 180 cents of U.S. currency. To get the fraction that should be used to compute the indirect quotation of the exchange rate expressed in British pounds, we have to change the 180 cents to dollars first.

Since 100 cents = 1 dollar, 180 cents = 1.8 dollars. Therefore, fraction should be used to compute the indirect quotation of the exchange rate expressed in British pounds will be:

= 1/1.8

7 0
2 years ago
In late April, the Acme Construction Co. submitted a $1,200,000 progress billing on a construction contract.On May 2, the bill w
patriot [66]

Construction expenditures should be debited when <u>D. The bill is approved for payment.</u>

<u>Explanation:</u>

In the above scenario, Acme Construction Co. submitted bill amount of $1,200,000 on a construction contract. The payment of the bill was approved on May 2. According to the contract, 10% was subject to retention.

This construction expenditure is debited when the bill is approved for payment. Contract includes all the details regarding payment and terms and conditions between the companies or parties.

Once the bill submitted by company is approved, then the retention amount will be automatically debited.

8 0
3 years ago
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