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BARSIC [14]
3 years ago
15

Gunslinger Company is considering the purchase of pipe cutting equipment. Data on the equipment are as follows: Original Investm

ent $35,000 Net Annual Cash Inflow $8,000 Expected Economic Life in Years 5 The Company uses the straight-line method of depreciation with no mid-year convention. What is the accounting rate of return (ARR) on original investment
Business
1 answer:
NeX [460]3 years ago
4 0

Answer:

4.86%

Explanation:

 The formula to compute the accounting rate of return is shown below:

= Annual net income ÷ original investment

where,

Average  Accounting Income is

= Annual Cash Inflow – Depreciation

= $8,000 - $6,300

= $1,700

The Depreciation is

= ($35000 - $,3500) ÷ 5 years

= $6,300

And, the original investment is $35,000

So, the accounting rate of return is

= $1,700 ÷ $35,000

= 4.86%

We simply applied the above formula

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The market value of the equity of Hudgins, Inc., is $645,000. The balance sheet shows $53,000 in cash and $215,000 in debt, whil
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Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes 4)Merchandise Inventory.

Product vending is the practice of intentionally promoting, showing, and promoting the goods in your keep. A huge part of this is visual merchandising—the process of making plans, designing, and showing merchandise to focus on their capabilities and advantages.

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Disclaimer: The question is incomplete. Please read below to find the missing content.

Question: Under the perpetual inventory system, all purchases of merchandise are debited to the account

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