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Alex777 [14]
3 years ago
9

Salt Company is considering investing in a new facility to extract and produce salt. The facility will increase revenues by $220

,000, but it will also increase annual expenses by $160,000. The facility will cost $980,000 to build, and it will have a $20,000 salvage value at the end of its useful life. Calculate the annual rate of return on this facility. Annual rate of return %
Business
1 answer:
e-lub [12.9K]3 years ago
5 0

Answer:

12%

Explanation:

Annual net income:

= Increase in annual revenue - Increase in annual costs

= $220,000 - $160,000

= $60,000

Average investment:

= (Initial investment + Salvage value at the end) ÷ 2

= (980,000 + 20,000) ÷ 2

= $500,000

Annual rate of return:

= (Annual net income ÷ Average investment) × 100

= ($60,000 ÷ $500,000) × 100

= 12%

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An entrepreneur needs to raise $20,000 for improvements to her factory. She plans to contribute 60 percent of this sum from her
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Answer:

$8,000

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8 0
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Which of the following people would be happy with a $10 price ceiling in this market for movie theatre popcorn bags?
dalvyx [7]

Answer:

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4 0
3 years ago
Cindy has been working for 8 years, and she’s built up a huge emergency fund -- $45,000, which would be 6 months of her salary.
baherus [9]

Answer with Explanation:

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If the inflation rate is higher than the return paid on the current account then it is better to invest in commodities like gold, petroleum products, etc, that are often termed as speculative investments.

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6 0
3 years ago
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slava [35]

Answer:

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3 0
3 years ago
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