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
dmitriy555 [2]
3 years ago
7

The Short-Line Railroad is considering a $100,000 investment in either of two companies. The cash flows are as follows: Year Ele

ctric Co. Water Works 1 $ 70,000 $ 15,000 2 15,000 15,000 3 15,000 70,000 4 – 10 10,000 10,000 a. Compute the payback period for both companies. (Round your answers to 1 decimal place.) b. Which of the investments is superior from the information provided? Electric Co. Water Works
Business
1 answer:
Alex Ar [27]3 years ago
8 0

Answer:

a. 3 years and 3 years

b. either company can be selected

Explanation:

a. In the payback, we analyze how many years the invested amount is recovered. The computation is shown below:

= Initial investment ÷ Net cash flow

For Electric Co.

In year 0 = $100,000

In year 1 = $70,000

In year 2 = $15,000

In year 3 = $15,000

In year 4 to 10 = $10,000

If we sum the first 3 year cash inflows than it would be $100,000 which is equal to the initial investment

So, the payback period equal to

= $100,000 ÷ $100,000 = 3 years

In 3 years, the invested amount is recovered.

For Water Works

In year 0 = $100,000

In year 1 = $15,000

In year 2 = $15,000

In year 3 = $70,000

In year 4 to 10 = $10,000

If we sum the first 3 year cash inflows than it would be $100,000 which is equal to the initial investment

So, the payback period equal to

= $100,000 ÷ $100,000 = 3 years

In 3 years, the invested amount is recovered.

b. Since both the companies has same payback period so either company can be selected

You might be interested in
EXPLAIN HOW IMPORTANT MOTIVATION IN AN ORGANIZATION ​
Olegator [25]
Level of commitment, drive and energy that a company's workers bring to the role everyday.
8 0
2 years ago
Read 2 more answers
Strategies developed at the departmental level, such as the accounting, human resources, production, and marketing departments,
mrs_skeptik [129]

Answer:

D. Functional Strategies

Explanation:

Functional Level Strategy is the strategy which is formulated in other  assist in the execution of corporate and business level strategies. These strategies are formulated based on the  guidelines given by the top level management.

The functional level management is concerned with tactical decision making i.e making decisions in the operational level of the organisation department which might include production, marketing, finance, human resource, research and development etc.

The functional level strategy is a day to day strategy that assist in achieving the broad aim of the organisation  

6 0
3 years ago
Cost of Units Completed and in Process The charges to Work in Process—Assembly Department for a period, together with informatio
MrRissso [65]

Answer:

<em>Cost of completed WIP:</em> 30,240

<em>Total cost of tranferreed-out:</em> 729,990

Explanation:

<em><u>We assume it works with weighted-average process costing</u></em>

Beginning 9,000 50% = 4,500   $22,050

Finished goods 207,000 units

Direct Materials 212,000 units at $1.6

Direct labor       $276,000

Overhead          $<u> 107,400    </u>

Total Overhead $383,400

started   212,000 units

<u>finished 207,000 units</u>

ending       5,000 units at 75%

EU Conversion Cost 207,000 + 5,000 x 75% =  210,750

<em>Cost per equivalent unit: 383,400 / 210,750 = 1,819217</em>

Cost of beginning WIP comepleted

22,050 beginning + 1.82 x 4,500 =  30,240

Cost of the units transferred to finished goods:

    22,050 beginning WIP balance

+ 207,000 x $1.6 materials

<u>+ 207,000 x $1.82 conversion cost  </u>

<em>Total:</em> 729,990

7 0
2 years ago
Days sales outstanding. Baxley Brothers has a DSO of 23 days, and its annual sales are $3,650,000. What is its accounts receivab
marishachu [46]

Answer:

$230,000

Explanation:

Given that,

Days sales outstanding, DSO = 23 days

Annual sales = $3,650,000

Assume that it uses a 365 day year

Accounts receivable = (Annual sales × Days sales outstanding) ÷ 365 days

                                  = ($3,650,000 × 23) ÷ 365 days

                                  = $83,950,000 ÷ 365 days

                                  = $230,000

Therefore, the Baxley Brothers has  $230,000 balance in its accounts receivable.

4 0
3 years ago
During 2011, Simon Kidman, the sole shareholder of a calendar year S corporation, received a distribution of $75,000. On Decembe
liraira [26]

Answer: c. Kidman recognizes a $1,000 LTCG

Explanation:

Long term gain can be calculated by the formula:

Capital gain = Distribution received - Basis in stock - Ordinary income earned

= 75,000 - 24,000 - 50,000

= $1,000

Long Term Capital gain is therefore $1,000.

3 0
3 years ago
Other questions:
  • DeLong Corporation was organized on January 1, 2017. It is authorized to issue 10,000 shares of 8%, $100 par value preferred sto
    9·1 answer
  • Which of the following will appear as a line item in the income statement prepared under variable​ costing? A. Total Cost of Goo
    11·1 answer
  • Analog computers needs to borrow $475,000 from the midland bank. the bank requires a 15% compensating balance. how much money wi
    7·1 answer
  • Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. T
    14·1 answer
  • Identify two different forms of income that are taxable
    14·1 answer
  • Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium pro
    9·1 answer
  • Anyone there PLAESe responed
    5·1 answer
  • A credit score is based in part on
    7·2 answers
  • Guys i want to get me and xugo this hat but ion which hats tho<br> plz help
    6·2 answers
  • NeXL
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!