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Harrizon [31]
3 years ago
10

Exercise 24-3 Payback period computation; straight-line depreciation LO P1 A machine can be purchased for $140,000 and used for

five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied, using a five-year life and a zero salvage value. Year 1 Year 2 Year 3 Year 4 Year 5 Net income $ 9,500 $ 23,500 $ 64,000 $ 35,500 $ 94,000
Business
1 answer:
kkurt [141]3 years ago
6 0

Answer:

Year 1 Year 2 Year 3 Year 4 Year 5 Net income $ 9,500 $ 23,500 $ 64,000 $ 35,500 $ 94,000

Explanation:

look p1 a machine

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Assume that interest rates on 20-year Treasury and corporate bonds with different ratings, all of which are noncallable, are as
Elina [12.6K]

Answer:

The question is missing the options which are below:

A Real risk-free rate differences.  

B Tax effects.  

C Default risk differences.  

D Maturity risk differences.  

E Inflation differences.  

The correct answer is option C,default risk differences.

Explanation:

Default risk is the increase in return given to an investor to compensate the investor for the likely losses that may arise due to the inability of the borrower to make funds available to the investor on the maturity date or even in required amount.

Different debt instruments have different default risk depending on their credit rating as rated by international rating agencies.Such rating is a function of many factors,which includes:

Balance sheet position

Profitability

Liquidity strength of the company

Macro-economic factors and some others.

Liquidity refers to the ability of the company to settle obligations such as repayment of bonds and interest  when due.

Invariably,liquidity has a higher impact in determining credit rating as well as default risk of an instrument.

3 0
3 years ago
"I’m not sure we should lay out $250,000 for that automated welding machine," said Jim Alder, president of the Superior Equipmen
NikAS [45]

Answer:

1.

The annual net cost savings promised by the automated welding machine

Annual Costs savings in replacing 6 welders $108,000

Reduced Material costs $6,500

Total annual Costs savings = $114,500

Note there is a $3,000 annual maintenance cost that will then be taken off this savings amount to make up the Annual Net cash inflow of $111,500

2

A. The Net Present value is $72,227. Kindly refer to the attached document for the clear presentation

B. The project should be accepted because it delivers a positive NPV. Meaning the net benefit outweighs the cost of owning the new Assets.

3.

The Discounted net Cash flow for the 6 years (aside the initial outlay) is $402,227.

Annually this comes to $67,038.

The benefit the business gets in the switch to the automatic welders is approximately $67,038 annually.

7 0
3 years ago
Midyear on July 31st, the Chester Corporation's balance sheet reported:
erastova [34]

Answer:

$76.856 million

Explanation:

As we know that Balance sheet is divided in two portions.

1. Total Assets (Current Assets + Fixed Assets)

2. Total Liabilities and Share Holders' Equity.

and they both should be equal. So we can write from the above information, as:

Total Assets = Total Liabilities + Total Common Stock + Retained Earnings

N.B. We are excluding Cash from our calculation cause we assume that Cash is already been included in Total Assets.

Hence, by putting the values in above equation we can find our Retained Earnings as:

Retained Earnings + $128.230 million + $6.350 million = $211.436 million

Retained Earnings + $134.58 million = $211.436 million

Retained Earnings = $211.436 million - $134.58 million

Retained Earnings = $76.856 million

6 0
3 years ago
How many days will it take for $1500 to earn $16 interest if it is deposited in a bank paying simple interest at the rate of 4%/
JulsSmile [24]

Answer:

97 days

Explanation:

In simple interest method, the interest is calculated by the following formula

I= P x R x T

I= interest

P = principal amount

R =interest rate

T= Time

In this case

I=$16

P=$1500$

R= 4% or 0.04%

T= time

$16= $1500 x 0.04 x Time

$16 =60 x Time

Time = 16/60

time = 0.2666 year.

time in days =  0.26666 x 365 days

=97.333 days

=97 days

8 0
3 years ago
The belief that capital punishment is now unconstitutional because society has changed is an example of what doctrine? A. Evolvi
Tasya [4]
A. Evolving standard??
7 0
3 years ago
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