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Kisachek [45]
4 years ago
6

It will cost $2,500 to acquire an ice cream cart. Cart sales are expected to be $1,500 a year for three years. After the three y

ears, the cart is expected to be worthless as the expected life of the refrigeration unit is only three years. What is the payback period?
Business
1 answer:
Dvinal [7]4 years ago
3 0

Answer: 1 year and 6 months

Explanation:

The cash flows are as follows,

Year 0 = ($2,500)

Year 1 = $1,500

Year 2 = $1,500

Year 3 = $1,500

Payback period is the time it will take to break even the intial investment (In this question the initial investment is $2,500)

The sum of the cashflows of year1 and year2 is equal to $3,000

which means that the payback period is somewhere bbetween year 1 and year2

1500/3000 = 0.5 year or 6 months

the total payback period is 1 year and 6 months

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5 0
4 years ago
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Why are shareholders more keen on investing in high-risk projects during times of financial distress?
Phoenix [80]

Answer:

Because the shares price of that company will be reduced that gives shareholders to own more thus owning a greater percentage of the company

Explanation:

Let's say <em>Washer</em><em> </em><em>Ltd</em><em> </em>is high-risk and they have taken a stand to reduce their ordinary share price in order to attract investors, from <em>R</em><em>6,90</em> to <em>R3</em><em>,</em><em> </em><em>90</em><em> </em>per share

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6 0
2 years ago
The level of aggregate supply in the long-run is not affected by:a) changes in technology.b) changes in the capital stock.c) cha
mixas84 [53]

The correct answer is choice c, changes in the price level.

Aggregate supply is only affected by capital, labor, and technology in the long run because everything in the economy is assumed to be used optimally. Of the options that are presented, the only option that is not capital, labor or technology is the change in price level, which makes it the correct answer.

3 0
4 years ago
How does a traditional adversarial relationship with suppliers change when a firm decides to move to a few suppliers
Lynna [10]

Answer and Explanation:

The traditional adversarial relationship with suppliers would change when a firm makes a decision to move to the new suppliers. The firm would focus more on the channels that provides more growth prospects.

Firms seek to build long term relationships with the few suppliers. Such long run relationship makes it more likely to recognize the specific objectives of the acquiring firm and the end customer.

4 0
3 years ago
True or False: Contributions received in a prior period and restricted by the donor for construction of a building were reported
noname [10]

Answer:

The correct answer is False.

Explanation:

If the contribution is for the subsequent acquisition of assets, in the same way as in the previous point it is carried as deferred income and amortized in line with the depreciation of the acquired asset, as amortization of deferred contributions.

Permanently restricted contributions are taken to this category in net assets and correspond to those that are represented in assets that must be kept in perpetuity.

Unrestricted contributions used in the year are taken directly to income; if they are not used in the year they are taken as part of the net assets without restrictions.

If the board of directors or equivalent body decides to allocate an unrestricted contribution item for a special purpose, it is carried as an internally restricted net asset.

Contributions with temporary restrictions are carried as part of the temporarily restricted net asset.

7 0
3 years ago
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