1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Radda [10]
3 years ago
10

A project has an initial cost of $80,000 and a 3-year life. The company uses straight-line depreciation to a book value of zero

over the life of the project. The projected net income from the project is $1,200, $2,300, and $2,800 a year for the next 3 years, respectively. What is the average accounting return? 5.25 percent 5.35 percent 5.45 percent 5.56 percent
Business
1 answer:
joja [24]3 years ago
4 0

Answer:

5.25%

Explanation:

The computation of the average accounting return is shown below:

Average accounting return is

= Average net income ÷ average initial cost

where,

Average net income is

= ($1,200 + $2,300 + $2,800) ÷ 3 years

= $2,100

And, the average initial cost is

= $80,000 ÷ 2

= $40,000

So , the average accounting return is

= $2,100 ÷ $40,000

= 5.25%

Hence, the average accounting return is 5.25%

You might be interested in
Pronghorn Corp has 3,200 shares of 8%, $103 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, th
-Dominant- [34]

Answer:

1) The dividend paid to preferred stockholders is $26,368

The dividend paid to Common stockholders is $96,632

2)  The dividend paid to preferred stockholders is $26,368

The dividend paid to Common stockholders is $96,632

3) The dividend paid to preferred stockholders is $79,104

The dividend paid to Common stockholders is $43,896

Explanation:

1) The preferred stock is non-cumulative & the company has not missed any dividend in previous years

The dividend paid to preferred stockholders = 3,200 shares × $103 × 8 % = $26,368

The dividend paid to Common stockholders = $123,000 - $26,368  = $96,632

2) The preferred stock is non cumulative & the company did not pay dividend in each of the previous 2 years.

The dividend paid to preferred stockholders = 3,200 shares × $103 × 8 % = $26,368

The dividend paid to Common stockholders = $123,000 - $26,368  = $96,632

3) The preferred stock is cumulative & the company did not pay dividend in each of the previous 2 years.

The dividend paid to preferred stockholders = 3,200 shares × $103 × 8% × 3 years = $79,104

The dividend paid to Common stockholders = $132,000 - $86,400 = $43,896

5 0
3 years ago
The relationship between average and marginal variables can be stated as follows: if the marginal is greater than the average, a
Lena [83]

Answer:

B. The average is increasing.

Explanation:

Average variables: It is the average change in the input units of production. It is calculated by dividing total amount of changes by total number of unit changed.

Marginal variables: It is change of one unit of input, which cause changes in total units of production. As the marginal variable changes, the average variable also changes as there is changes in total unit of productions.

Hence,  if the marginal is greater than the average, the average is increasing.

7 0
3 years ago
Katherine, Alliah, and Paulina form a partnership. Katherine contributes $150,000. Alliah contributes $150,000, and Paulina cont
ryzh [129]

Answer:

$33,750

Explanation:

The computation of the amount of income which is credited to Katherine's capital account is shown below:

= (Katherine contribution ÷ total contribution) × partnership income

= ($150,000 ÷ $400,000) × $90,000

= $33,750

The total contribution equals to

= Katherine contribution + Alliah contribution + Paulina contribution

= $150,000 + $150,000 + $100,000

= $400,000

8 0
3 years ago
Targaryen Corporation has a target capital structure of 75 percent common stock, 10 percent preferred stock, and 15 percent debt
erastova [34]

Answer:

a.

WACC = 0.07961 or 7.961% rounded off to 7.96%

b.

After tax cost of debt = 0.0474 or 4.74%

Explanation:

a.

The weighted average cost of capital or WACC is the cost of a firm's capital structure. To calculate the WACC, we multiply the weight of each component of the capital structure by the cost of that component. The components of capital structure can be one or all of the following namely debt, preferred stock and common stock.

The formula for WACC is,

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

Where,

  • w represents the weight of each component
  • r represents the cost of each component
  • D, P and E represents debt, preferred stock and common stock respectively

WACC = 0.15 * 0.06 * (1 - 0.21)  +  0.1 * 0.05  +  0.75 * 0.09

WACC = 0.07961 or 7.961% rounded off to 7.96%

b.

The after tax cost of debt is calculated by multiplying the cost of debt by (1 - tax rate) to adjust for the tax advantage provided by debt as interest payments on debt are tax deductible.

After tax cost of debt = 0.06 * (1 - 0.21)

After tax cost of debt = 0.0474 or 4.74%

7 0
3 years ago
Please complete the following sentence from our reading: This brings us to the second reason mass media models are persuasive: T
Rina8888 [55]

Answer:

Desired and welcomed in various social situations

Explanation:

Mass media reaches the large audiences, whether it is internet, television or radio. The influence on everyday life is therefore very strong, whether it is the way we vote, our individual views and believes or shaping of our knowledge about certain topic based on true or false information.

7 0
3 years ago
Other questions:
  • How does the Small Business Administration (SBA) categorize some types of insurance needs?
    14·2 answers
  • ame the five types of customer-introduced variability and discuss options that let companies offer a high level of accommodation
    8·1 answer
  • Garber Plumbers offers a 20% trade discount when providing $2,000 or more of plumbing services to its customers. In March 2021,
    13·1 answer
  • Suppose that Katy sells egg rolls. The total cost of production, based on the number of egg rolls produced, is shown in the foll
    6·1 answer
  • Eton Corporation purchased land in 1998 for $190,000. In 2018, it purchased a nearly identical parcel of land for $430,000. In i
    5·1 answer
  • Dreidell Corporation expected to use 1.1 direct labor hours to produce one unit of their product, at a rate of $12/DLH. Actual r
    13·1 answer
  • Big Fork Lumber Company incurs a cost of $402 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it se
    11·1 answer
  • An economic term for any person who uses goods or services. Sometimes a consumer buys a good or service. Sometimes, the goods or
    12·1 answer
  • In a closed economy with only lump-sum taxation, if the marginal propensity to consume is equal to 0. 75, a $70 billion increase
    6·1 answer
  • Which of these is a variable expense?
    5·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!