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Novay_Z [31]
3 years ago
6

Annual maintenance costs for a particular section of highway pavement are $2500. The placement of a new surface would reduce the

annual maintenance cost to $500 per year for the first 3 years and to $1000 per year for the next 7 years. After 10 years the annual maintenance would again be $2500. If maintenance costs are the only saving, what investment can be justified for the new surface? Assume interest at 5%.
Business
1 answer:
rewona [7]3 years ago
6 0

Answer:

The maximum investment is $6,360.111

Explanation:

Giving the following information:

The placement of a new surface would reduce the annual maintenance cost to $500 per year for the first 3 years and to $1000 per year for the next 7 years. After 10 years the annual maintenance would again be $2500.

We need to find the net present value. The maximum initial investment will be the amount that makes the NPV cero.

NPV=∑[Cf/(1+i)^n]

Cf= cash flow

<u>For example:</u>

Year 1= 500/1.05= 476.19

Year 3= 500/1.05^3= 431.92

Year 5= 1,000/1.05^5= 783.53

NPV= 6,360.111

The maximum investment is $6,360.111

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3 years ago
On February 1, a customer's account balance of $2,700 was deemed to be uncollectible. What entry should be recorded on February
Anvisha [2.4K]

Answer:

On February 1, a customer's account balance of $2,700 was deemed to be uncollectible.

The entry to be recorded on February 1 to record the write-off assuming the company uses the allowance method is:

Debit Allowance for Doubtful Accounts $2,700; credit Accounts Receivable $2,700.

Explanation:

Using the allowance method, every bad debt entry is first reflected in the Allowance for Doubtful Accounts before it is taken to the bad debt expense account.

The entries above reduce the Accounts Receivable account by the amount of the write-off and reduces the Allowance for Doubtful Accounts by the same amount.  Any recovery of written off debt is also treated in the Allowance for Doubtful Accounts and the Accounts Receivable account in revised order.  This method is unlike the direct write-off method.  With the direct write-off method, the Accounts Receivable is credited with the amount of the write-off and the write-off is expensed in the Bad Debts Expense account directly.

5 0
3 years ago
Bud exchanges land with an adjusted basis of $ 22,000 and a fair market value of $ 30,000 for another parcel of land with a fair
erastovalidia [21]

Given :

Bud exchanges land with an adjusted basis of $ 22,000 and a fair market value of $ 30,000 for another parcel of land with a fair market value of $ 28,000 and $2,000 cash.

To Find :

What is Bud's recognized gain or loss.

Solution :

This is a transaction of like kind exchange.

So, gain or loss to be recognized is :

= ( 28000+2000) - 28000\\\\=\$ 2000

Therefore, option B) is correct.

6 0
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To win back customers after they have discontinued service, when should the initial communication be made? g
nataly862011 [7]

The following methods can be used to successfully win back customers after they have discontinued service.

<h3>Successfully Re-engage Customers:</h3>
  • Consider the primary cause of the customer's initial reluctance. Take some time to consider what drove your brand to this point before developing unique methods for your re-engagement plan.
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  • Digital re-targeting is the practice of setting cookies on visitors to your website or social media profiles, or tagging them, and classifying them into groups depending on the pages they visit and how they interact with your website.

Existing clients that have already chosen to use your brand for commercial purposes are quite valuable. Don't let them disappear into oblivion.

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4 0
1 year ago
Taxes on the purchase of specific items such as gasoline, cigarettes, or alcoholic beverages are called _____ taxes.
marishachu [46]

Answer:

<em>Taxes on the purchase of specific items such as gasoline, cigarettes, or alcoholic beverages are called </em><em><u>excise</u></em><em> taxes.</em>

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