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3 years ago

Which of the following is not an advantage of the average rate of return method?

Business

1 answer:

Rufina [12.5K]3 years ago

5 0

Answer:

a. emphasizes accounting income

Explanation:

Average rate of return is calculated using annual returns, for the period for which the investment is made.

The formula to calculate so = $\frac{Average return during the period}{Average investment}$

Where average return during the period = total of return during the entire life of the investment divided into number of years, or tenure of investment.

Average investment = (Opening investment + Closing investment)/2.

Therefore it does not consider the accounting income, it takes into consideration, it considers total return from each particular investment.

Thus emphasizing on accounting income is not an advantage of average rate of return method.

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Internal control does not consist of policies and procedures that

kotegsom [21]

Answer:

d.guarantee the company will earn a profit

Explanation:

Internal controls are controls put in place by management to mitigate against identified risk. Risk basically refers to what could go wring in a process. Controls are put in place to mitigate against the risk of error or fraud and do not necessarily prevent the company from making a loss.

Companies make profit or loss based on management's decisions such as where to invest, what time to invest, introduction of a new product, management of cost of sales and operating expenses etc

Internal controls basically consist of policies and procedures that ensure that the company's asset are not misused (fraud), no misrepresentation of revenue (fraud), employees and managers comply with laws and regulations, business information is accurate ( no misrepresentation of records due to error) etc.

Hence Internal control does not consist of policies and procedures that guarantee the company will earn a profit.

The right option is d.

4 0

3 years ago

The following information is available on a depreciable asset owned by Mutual Savings Bank:

BARSIC [14]

Answer:

$4366.67

Explanation:

Given: Asset book value on july 1, year 3= $57800

Salvage value= $5400

Useful life left= 6 years.

Now, computing the depreciation expense under straight line method.

Formula; Depreciation= $\frac{Asset\ book\ value - salvage\ value}{useful\ life}$

Useful life in months= $6\times 12= 72\ months$

Next, Depreciation expense= $\frac{57800-5400}{72} = \$ 727.77$

∴ Monthly depreciation expense= $ 727.77

Depreciation expense for last six months of year 3= $727.77 \times 6= \$ 4366.67$

∴ Depreciation expense for last six month of year 3 is $4366.67.

3 0

4 years ago

why school cant just end why cant we have a president that stops school im not learning anything anyway

gavmur [86]

Answer:You are so right I can't learn anything either Good day

Explanation:YOU CHOOSE THE SMARTEST

5 0

3 years ago

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,

GrogVix [38]

Answer:

D. Increased $45,00

Explanation:

Assume that the total assets of the business was $100,000 and the liabilities was $50,000 and the equity was also $50,000.These figures can be expressed in terms of the accounting equation as follows:

Total assets=Total liabilities+Total equity

100,000=50,000+50,000

Now consider that the above mentioned liabilities are increased by $75,000 as stated in question and above mentioned equity is decreased by $30,000 as stated in question, then the assets as per accounting equation can be determined as follows:

Total liabilities=50,000+75,000=$125,000

Total equity=50,000-30,000=$20,000

Assets=$125,000+$20,000=145,000

Total increase in assets=$145,000-$100,000=$45,000

So the answer is D. Increased $45,000

6 0

3 years ago

The dry cleaning industry is in monopolistic competition. In the short run, the profit-maximizing price is $10 per item and t

vitfil [10]

Answer:

$ 0

Explanation:

Under monopolistic competition, firms reach equilibrium in the long-run: this equilibrium is a point in which the marginal cost of producing one additional unit of ouput are the same as the marginal revenue from the sale of the same additional unit of output.

In other words, in the long-run, firms under monopolistic competition can only break-even, they do no obtain economic profits.

4 0

3 years ago