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
PilotLPTM [1.2K]
3 years ago
11

The following data concerns a proposed equipment purchase: Cost $144,000 Salvage value $4,000 Estimated useful life 4 years Annu

al net cash flows $46,100 Depreciation method Straight-line The annual average investment amount used to calculate the accounting rate of return is:
a.$72,000
b.$70,000
c.$37,000
d.$74,000
e.$48,950
Business
1 answer:
Digiron [165]3 years ago
6 0

Answer:

d.$74,000

Explanation:

The annual average investment is given by the average of the initial investment (144,000) and the scrap value (salvage value = 4,000)

The average investment amount is:

AAI = \frac{144,000+4,000}{2}\\ AAAI = \$74,000

The annual average investment amount used to calculate the accounting rate of return is: d.$74,000

You might be interested in
Targaryen Corporation has a target capital structure of 75 percent common stock, 10 percent preferred stock, and 15 percent debt
erastova [34]

Answer:

a.

WACC = 0.07961 or 7.961% rounded off to 7.96%

b.

After tax cost of debt = 0.0474 or 4.74%

Explanation:

a.

The weighted average cost of capital or WACC is the cost of a firm's capital structure. To calculate the WACC, we multiply the weight of each component of the capital structure by the cost of that component. The components of capital structure can be one or all of the following namely debt, preferred stock and common stock.

The formula for WACC is,

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

Where,

  • w represents the weight of each component
  • r represents the cost of each component
  • D, P and E represents debt, preferred stock and common stock respectively

WACC = 0.15 * 0.06 * (1 - 0.21)  +  0.1 * 0.05  +  0.75 * 0.09

WACC = 0.07961 or 7.961% rounded off to 7.96%

b.

The after tax cost of debt is calculated by multiplying the cost of debt by (1 - tax rate) to adjust for the tax advantage provided by debt as interest payments on debt are tax deductible.

After tax cost of debt = 0.06 * (1 - 0.21)

After tax cost of debt = 0.0474 or 4.74%

7 0
3 years ago
Sheila receives a merit scholarship to cover part of her private college tuition. Her parents have a low income, poor credit, an
vfiekz [6]

Answer:

The correct answer would be D, Sheila's parents will qualify for a Plus loan because of their low income.

Explanation:

PLUS loan stands for Parents Loan for Undergraduate Students. It is the loan given to the parents of the students who are graduating with the college. It can be a post secondary loan. This loan is given to the students who cannot afford to meet the expenses of their studies as well as of other activities like books, notes, handouts etc. This loan is given to the parents of the students who have low incomes and can't afford to finance their child's education.

8 0
3 years ago
On July 31, the bookkeeping account Supplies Inventory shows a debit balance of $1,000. A physical inventory taken on that date
Tanya [424]

Answer:

$200

Explanation:

When Supplies inventory are purchased, a debit is posted to Supplies inventory and a credit to cash account or accounts payable.

As the inventories are used, debit Supplies expense and credit Supplies inventory account.

Given that $1,000 was the debit in the books and $800 per count, it means the books balance needs to be written down to the physical balance. The difference to be posted

= $1,000 - $800

= $200

This will be done by

Debit Supplies expense  $200

Credit Supplies Inventory  $200

Being entries to record inventory used in July

4 0
3 years ago
Mr. Deli wants to start a small sandwich shop in his neighborhood. He has enormous amounts of cash that he inherited from his Un
Brilliant_brown [7]

Answer:

sole proprietorship

Explanation:

A sole proprietorship is a type of business that is owned by one person

Characteristics

1. it is owned by one person

2. the business has unlimited liability

3. the business has limited access to capital

4. the business usually lacks continuity. this type of business usually ceases to exist when the owner dies

5. the business is usually not separated from the owner

8 0
2 years ago
Helena is only a couple months into running her nail salon business and she
antiseptic1488 [7]

Answer:

A

Explanation:

3 0
3 years ago
Read 2 more answers
Other questions:
  • One guide to choosing a leadership approach uses a series of questions. For example, "Is decision quality highly important?" or
    15·1 answer
  • The Atlantic Division of Stark Productions Company reported the following results for 2016:
    15·1 answer
  • 4. What's the term for the profit made from selling a stock at a higher price than the price paid for the stock?
    12·1 answer
  • Who said "to be cheerful act as if cheerfulness were already there."?
    11·1 answer
  • Use the following data to compute total manufacturing costs for the month:
    11·1 answer
  • Henry has a $10,000 car insurance policy with a $400 per claim deductible. Henry is involved in an accident, and his car sustain
    14·1 answer
  • Confused as heck need help
    5·2 answers
  • If GDP is $15 trillion, how many years will it take for GDP to increase to $30 trillion if annual growth is 2 percent
    7·1 answer
  • Within her company, nadine utilizes a management style that varies according to the individual and environmental situation, with
    13·1 answer
  • Anna is trying to find a topic for her informative presentation. which strategy might she use to help find an appropriate topic?
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!