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Leokris [45]
2 years ago
12

The management of Stanforth Corporation is investigating automating a process. Old equipment, with a current salvage value of $2

4,000, would be replaced by a new machine. The new machine would be purchased for $468,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $161,000 per year in cash operating costs. The simple rate of return on the investment is closest to__________.
Business
2 answers:
julia-pushkina [17]2 years ago
7 0

Answer:

The simple rate of return on investment is 17.73%

Explanation:

The simple interest rate of return on the investment can be calculated by the formula given thus:

Simple rate of return=net income/investment

The net income =savings in operating costs less depreciation

Savings in operating costs =$161000

depreciation=cost -salvage value/number of years

Depreciation=468000-0/6=$78000

Net income=$161000-$78000

Net income=$83000

Simple rate of return =83000/468000

                                    =17.73%

madreJ [45]2 years ago
3 0

Answer:

Simple rate of return = 17.7%

Explanation:

Simple rate of return = incremental operating income ÷ initial investment

Depreciation = $468,000 ÷ 6years = $78,000

incremental operating income = $161,000-$78,000 =$83,000

Simple rate of return = $83,000÷$468,000=17.7%

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FinnZ [79.3K]

Answer:

D.

Municipal bond because the equivalent taxable yield is 6.6%

Explanation:

we should make the important difference that municipal bonds are tax free while corporate bonds don't.

Therefore we should solve for the after tax rate fo the corporate bond:

pretax (1-t) = after tax -rate\\0.0625(1-0.28) = 0.0625(0.72) = 0.045

The corporate bond as a yield of 4.5% after taxes which is lower than the municipal bond. This make it more attractive

We can also solve for the pre-tax rate of the municipal bond:

pretax(1-t) = after tax - rate\\pretax (1-0.28) = 0.0475\\pretax = 0.0475/0.72 = 0,065972 = 0.066

the municipal bonds would be equivalent to a 6.6% corporate bonds.

This makes option D correct.

6 0
3 years ago
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Gekata [30.6K]
When making an attribution, Dan considers how this roommate has behaved in similar situations in the past. Dan is using consistency information. 

Information consistency refers to the same thing, being consistent, that even though something may be slightly different the outcome remains the same. In this case, Dan is assuming his roommate will make the same behavior choices as he has previously. 
7 0
3 years ago
An organizationally-driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best.
VARVARA [1.3K]

Answer:

True

Explanation:

Outsourcing is when a company gives some of its internal activities to an external party that takes the responsibility to get things done and one of the reasons for a company to do this is to get rid of activities that have to get done but that are not part of their core operations to be able to concentrate on their main activity and get those things done by experts which can help increase productivity. According to that, the answer is that the statement is true.

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Varvara68 [4.7K]

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On January 2, 2016, Sarah Lawrence Co. issued at face value $10,000 4% bonds convertible in total into 2,000 shares of Lawrence’
viva [34]

Answer:

b) $.19

Explanation:

Diluted earnings per share

= [net income + (convertible debt interest(1 - tax rate)]/(outstanding common shares + potential shares )

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