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il63 [147K]
3 years ago
15

A company is considering the purchase of a new piece of equipment for $117,200. Predicted annual cash inflows from this investme

nt are $53,000 (year 1), $21,500 (year 2), $26,500 (year 3), $20,500 (year 4) and $23,000 (year 5). The payback period is:
Business
1 answer:
monitta3 years ago
8 0

Answer:

3.79 years

Explanation:

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

In year 0 = $117,200

In year 1 = $53,000

In year 2 = $21,500

In year 3 = $26,500

In year 4 = $20,500

In year 5 = $23,000

If we sum the first 3 year cash inflows than it would be $101,000

Now we deduct the $101,000 from the $117,200 , so the amount would be $16,200 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it

And, the next year cash inflow is $20,500

So, the payback period equal to

= 3 years + $16,200 ÷ $20,500

= 3.79 years

In 3.79 years, the invested amount is recovered.  

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Answer: 1. A . Treasury bonds are not completely riskless, since their prices will decline when interest rates rise.

2. A. The New York City government

3. B. Municipal bonds

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5. B. Treasury bonds

Explanation:

1. Treasury Bonds are known as the safest bonds in the world and so are generally considered risk-less. However this is not so as they still fall victim to Interest rate risk which is the risk that their prices will decline when interest rates rise because bond prices are inversely related to price.

2. The City of New York issued to bonds in question so it is a New York City Government bond.

3. Municipal Bonds are issued by a state, county or a municipality so the above is a Municipal bond as it was issued by the City of New York.

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6 0
3 years ago
Data concerning Pony Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 200 100 % Variable exp
Luda [366]

Answer:

$18,000

Explanation:

The computation of overall effect on the company's monthly net operating income is shown below:-

                                 Current                 Proposed

Sales                       $800,000               $837,000

                        (200 × 4000)     (200 - 14) × (4,000 + 500)

Variable expenses  $160,000             $180,000

                              (40 × 4000)  (40 × (4,000 + 500))

Contribution margin $640,000            $657,000

Fixed expenses     $531000                 $566,000

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8 0
3 years ago
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Answer:

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The spa package budget will be achieved in six weeks, thereby qualifying as a short term goal. Long-term goals contrast short term goals as they take longer than one year to achieve.

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