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melamori03 [73]
3 years ago
7

Callaway Golf Co. leases telecommunication equipment from Photon Company. Assume the following data for equipment lease form Pho

ton Company. The lease term is 5 years and requires equal rental payments of $31,000 at the beginning of each year. The equipment has a fair value at the commencement of the lease of $150,000, an estimated useful life of 8 years, and a guaranteed residual value at the end of the lease of $15,500. Photon set the annual rental to earn a rate of return of 6%, and this fact is known to Callaway. The lease does not transfer title or contain a bargain purchase option and is not a specialized asset. How should Callaway classify this lease?
Business
1 answer:
inessss [21]3 years ago
3 0

Answer:

This lease is  regarded and classified  as Capital lease.

Explanation:

This lease is  regarded and classified  as Capital lease.

Here, Callaway Golf Co. is the body financing the leased asset but the right ownership is with Photon Company.

Now; the present value of future payment is calculated as:

Present value of future payment =[PVA 6%,5 × Annual payment ]+[PVF 6%,5 × Residual value]

=[4.46511 × 31000] +[0.74726 × 15500]

= 138418.27+ 11582.53

= 150000

However the present value of minimum lease payment is equal or more than 90% fair market value ,as such we therefore conclude that this  lease is a capital lease.

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Victor Rumsfeld Inc.'s dividend policy is under review by its board. Its projected capital budget is $2,000,000, its target capi
melomori [17]

Answer:

The multiple choices are

a.  $240,000

b. $228,000

c. $216,600

d.$205,770

e. $0

The correct option is E,$0

Explanation:

The funding required from equity is 40% of the projected capital budget of $2000,000 which is expected to be from the profit attributable to stockholders since new issue of shares is not contemplated.

In other words, dividends payable to shareholders is the net income less their counter funding of the project which is computed below:

residual dividends=net income-(equity%*capital outlay)

residual dividends=$300,000-(40%*$2000,000)

                               =$300,000-$800,000=$0

In essence the $300,000 is not even enough as funds expected from equity less alone paying excess as dividend

3 0
4 years ago
Derek is launching his career with a job as a human resource assistant. he wants to earn certifications that will help him demon
34kurt

The answer is<u> "The Society for Human Resource Management and HR Certification Institute".</u>


While investigating prerequisites for resource management jobs, it before long ends up obvious that HR confirmation is rapidly moving from being liked to being required. This is an indication that associations, regardless of whether in the for-benefit or non-benefit part, are seeing proficient accreditation with an expanding level of regard.  

In fact, HR certification is currently observed as a central expansion to any HR expert's resume, especially as the present experts in human asset administration confront complex difficulties, for example, an absence of qualified ability and the globalization of business.  

There are a number of nationally recognized human resources designations, including:

Society of Human Resource Management (SHRM)

3 0
3 years ago
With reference to the new products process, a firm adopts the ready—fire—aim approach when it:1. lacks senior management support
iris [78.8K]

Answer:

4. does not do the required homework before beginning development.

Explanation:

Ready Fire Aim approach is undertaken when the company is not prepared and has placed the product in the market with the aim that improvements will come later.

This approach is used to collect the responses of the customers and study the patterns of behavior. As we get the responses we improve the product accordingly.

This approach is used in product development processes.

4 0
3 years ago
Which of the following is not one of the guiding questions to creating a Strategic Business Plan?
inysia [295]
What do we want is the answer I believe, correct me if I’m wrong
7 0
3 years ago
Assume that investors can borrow and lend at risk-free rate of 5%. The optimal tangent portfolio on the efficient frontier has a
gizmo_the_mogwai [7]

Answer:

B. Portfolio B with E(R)=13% and STD=18%

Explanation:

The computation is shown below;

Reward to risk ratio = (15% - 5%) ÷ 20% = 0.5

The porfolio should be in line i.e.

= 0.05 + 0.5 × standard deviation

For portfolio A

= 0.05 + 0.5 × 25

= 17.5%

For portfolio C

= 0.05 + 0.5 × 1

= 5.5%

Portfolio B, the std is 18%

So,

= 0.05 + 0.5 × 18%

= 14%

5 0
3 years ago
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