1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Helen [10]
3 years ago
10

Champion Bakers uses specialized ovens to bake its bread. One oven costs $689,000 and lasts about 4 years before it needs to be

replaced. The annual operating cost per oven is $41,000. What is the equivalent annual cost of an oven if the required rate of return is 13 percent?
A. ​-$272,638
B. ​-$248,313
C. ​-$232,407
D. ​-$200,561
E. ​$196,210
Business
1 answer:
Strike441 [17]3 years ago
5 0

Answer:

A. ​-$272,638

Explanation:

Firstly, we need to calculate the total present value of initial investment plus all operating cost of the project. Then we will use that amount to solve for equal-amount annual operating cost.

Total present value of the project is -689,000 - 41,000/(1+13%) - 41,000/(1+13%)^2 + ... + 41,000/(1+13%)^4, or -810,953.32 (negative sign mean cost).

So, the equivalent annual cost of an oven is -272,638.

The equation solving problem can be made easily using Excel or BA II plus calculator.

You might be interested in
Assume that interest rate parity holds and that 90-day risk-free securities yield 6% in the United States and 6.5% in Germany. I
Marianna [84]

Answer: 1.356345

Explanation:

Based on the scenario and information provided in the question, the 90-day forward rate will be calculated as:

= Spot Rate × (1 + Germany Interest Rate) / (1 + United States Interest Rate)

= 1.35 × (1 + 6.5%) / (1 + 6%)

= 1.35 × (1 + 0.065) / (1 + 0.06)

= 1.35 × 1.065/1.06

= 1.35 × 1.0047

= 1.356345

3 0
3 years ago
Phillip is a senior journalist at a news agency. He goes on a temporary leave for six months and travels around different parts
Gelneren [198K]

Answer:

Sabbatical

Explanation:

a period of paid leave granted to a university teacher or other worker for study or travel, traditionally one year for every seven years worked.

8 0
3 years ago
What is the difference between independent variables and dependent variables in a spreadsheet?
kirill115 [55]
On a spreadsheet there are two types of variables independent and dependent. Independent variables refer to those that can be changed and their value that is changing. A dependent variable is something that remains the same and the value of it does not change. 
6 0
3 years ago
Georgia company (a u.s. firm) wants to export to the country of zumosa and conducts a country risk analysis. all country risk ch
artcher [175]
<span>Georgia company (a u.s. firm) wants to export to the country of Zumosa and conducts a country risk analysis. all country risk characteristics of Zumosa except a blockage of funds that are remitted by subsidiaries established in Zumosa should be examined for this purpose.</span>
8 0
3 years ago
A company uses the weighted-average method of inventory valuation under a periodic inventory system. The company began the year
Lady bird [3.3K]

Answer:

$935.61

Explanation:

Firstly, we need to calculate weighted average inventory cost at every time anchors (purchase - in or sell - out)

At time t = 1, 64 units @ 5 per unit.

At time t = 2, 64 + 110 = 174 units @ (64 x 5 + 110 x 5)/(64 + 110) = 5 per unit.

At time t = 3, 174 - 90 = 84 units @ 5 per unit.

At time t = 4, 84 + 55 = 139 units @ (84 x 5 + 55 x 6)/(84 + 55) = 5.40 per unit.

At time t = 5, 139 - 90 =  49 units @ 5.40 per unit.

Cost of goods sold for the year = 90 x 5 + 90 x 5.40 = $935.61

7 0
3 years ago
Other questions:
  • The following labor standards have been established for a particular product: Standard labor-hours per unit of output 10 hours S
    8·1 answer
  • Probably the most critical 'premise' of the marketing concept is that the firms should focus on identifying and satisfying custo
    12·1 answer
  • ABC Medical Technology, a fast-growing global research firm, has accumulated so much client information that conventional databa
    7·2 answers
  • Prospective utilization review is:
    6·1 answer
  • airline tickets may be charged directly to the organization, or the traveler may pay and be reimbursed by the company?
    13·1 answer
  • XYZ produces a single product and has provided the following data for its most recent month of operations:
    13·1 answer
  • the mass of an element is 27 and it's atomic number is 13. what is the composition of the nucleus of it's atom?​
    5·1 answer
  • the most effective use of the interim ___ is to establish cost standards and compare the actual amount with the budgeted amount
    7·2 answers
  • Beedles Inc. needed to raise $14 million in an IPO and chose Security Brokers Inc. to underwrite the offering. The agreement sta
    5·1 answer
  • Baldwin corp. ended the year carrying the most inventory. calculate baldwin corp.'s dollars of additional revenue (in dollars) i
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!