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trasher [3.6K]
4 years ago
5

Should Tangshan Mining company accept a new project if the​ company's maximum payback is 3.5 years and the​ project's initial af

terminustax cost is​ $5,000,000 followed by afterminustax operating cash inflows of​ $1,800,000 in year​ 1, $1,900,000 in year​ 2, $700,000 in year​ 3, and​ $1,800,000 in year​ 4? A. ​No, since the payback period of the project is more than the maximum acceptable payback period. B. ​Yes, since the risk exposure of the project is less than the maximum acceptable risk exposure. C. ​Yes, since the payback period of the project is less than the maximum acceptable payback period. D. ​No, since the risk exposure of the project is more than the maximum acceptable risk exposure.

Business
1 answer:
myrzilka [38]4 years ago
6 0

Answer:

The correct option is (C)

Explanation:

Payback period is the time period within which initial investment is recovered.

Here, maximum payback period is 3.5 years.

Initial investment is $5,000,000

It is a case of uneven cash flow. So, cumulative cash flow need to be computed. The entire calculation is shown in the spreadsheet below.

cumulative cash flow is positive in year 4.

so, payback period = 3+\frac{600,000}{1,800,000}

                                = 3.33 years

Since, maximum payback period is 3.5 and actual payback period is below the maximum limit, project should be accepted.

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0.40

Explanation:

The four firm concentration ratio = 10%+ 10% + 10% + 10% = 40% =0.40

I hope my answer helps you

5 0
4 years ago
An account receivable that has been written off against the allowance account
vovangra [49]

Answer: D

Explanation:

Total assets changes when an account is written off under the allowance method.

7 0
3 years ago
Radford Inc. manufactures a sugar product by a continuous process, involving three production departments-Refining, Sifting, and
nalin [4]

Answer:

Following are the solution to this question:

Explanation:

In point 1:

Date                 Title                                  post reference           Dr.               Cr.   30-sep       Method work – refining             141                  388000  

                          Materials                              131                                    385000  

In point 2:

Date                 Title                                  post reference           Dr.               Cr.   30-sep        Method work – refining                  141              141000  

                   Payable Wages                                 251                              141000

In point 3:

Date                 Title                                  post reference           Dr.               Cr.   30-sep        Method work – refining                 141               96800  

                   Factory overhead- refining            151                                96800

In part B:

Date                 Title                                  post reference           Dr.               Cr.   30-sep          Method work – Sifting               142                 625600

           (388000+141000+96800+(29800-30000))

              Method work – refining                     141                                 625600

5 0
3 years ago
A company purchased factory equipment on June 1, 2021, for $160,000. It is estimated that the equipment will have a $10,000 salv
likoan [24]

Answer:

$8,750

Explanation:

The computation of the depreciation expense under the straight-line method  is shown below:

= (Original cost - salvage value) ÷ (useful life)

= ($160,000 - $10,000) ÷ (10 years)

= ($150,000) ÷ (10 years)  

= $15,000

In this method, the depreciation is same for all the remaining useful life\

Now for the 7 months, the depreciation expense would be

= $15,000 × 7 months÷ 12 months

= $8,750

The 7 months is computed from July 1 to December 31

7 0
4 years ago
There are two people in the economy: Martha and Charlie. There are two goods in the economy: books and wine. Martha is endowed w
balu736 [363]

Answer:

Charlie consumes 100 books and 25 wines at pareto-optimal allocation, is the right answer.

Explanation:

According to the question, book is denoted with b whereas, wine is denoted with w.

The Utility function of Martha is-  U\left ( b,w \right )=6b+24w

The Utility function for Charlie is- U\left ( b,w \right )=bw

P_{b} = $1 : P_{w} = $4

At pareto-optimality,

MRS_{bw}=\frac{P_{b}}{P_{w}}\\\frac{w}{b}=\frac{1}{4}\\4w=b\\

The budget constraint,

1.b+4.w=m=1\left ( 20 \right )+4\left ( 45 \right )\\b+4w=20+180\\4w+4w=200\\w=\frac{200}{8}=25\\\therefore b=100

Therefore, it may be said that Charlie must consume 100 books and 25 wine at pareto-optimal allocation.

3 0
4 years ago
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