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Alla [95]
3 years ago
8

"Addison Corp. is considering the purchase of a new piece of equipment. The equipment will have an initial cost of $522,000, a 3

year life, and no salvage value. If the accounting rate of return for the project is 6%, what is the annual increase in net cash flow
Business
1 answer:
Vlad [161]3 years ago
4 0

Answer:

$31,320.00

Explanation:

The formula for accounting rate of return is the annual net cash flow divided by the initial investment.

If the initial investment was $522,000 and the accounting rate of return is computed to be 6% per year, hence the annual increase in cash flow accruing from the investment can be calculated by changing the subject of the formula.

ARR=annual increase in cash flow/initial investment

ARR is 6%

initial investment is $522,000

annual increase in cash flow?

6%=annual increase in cash flow/$522,000

annual increase in cash flow=6%*$522,000= $31,320.00  

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PtichkaEL [24]

Answer:

Option B (bail-out) is the correct approach.

Explanation:

  • For something like a variable annuity, a clause states that even though the investment on either the annuity happens to fall underneath a specified amount, the insured person will make additional withdrawal effects through loss.
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Some other available choices do not apply to the types of situations in question. So that the argument presented above should be appropriate.

8 0
3 years ago
Read 2 more answers
On January 1, James Company reported total current assets of $658,000 and total current liabilities of $365,000. During the year
jek_recluse [69]

Answer:

$370,440

Explanation:

The computation of the working capital is as follows:

As we know that

Working capital = Current asset - current liabilities

where,

Current Assets is

= Total current assets - purchase of an equipment - salaries - borrowed amount

= $658,000 - $2,000 - $560 + $80,000

= $735,440  

And, Current Liabilities is $365,000  

So, the working capital is

= $735,440 - $365,000    

= $370,440

7 0
3 years ago
Determine the cost of merchandise sold for the transaction on September 25 using the perpetual inventory system and the FIFO met
GuDViN [60]

Answer:

b.$77

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beginning used.

purchase september 4th   7  untis at $6

September 25th Sale of 12 units

<u>inventory used for second sale:</u>

September 4th   7  untis at $6

September 15th  5 units at $7

total COGS for the sale: $77

7 0
4 years ago
The national incident management system is
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4 years ago
Use table 19-1. in 2005, there were approximately 60.6 million swine in the u.s. about how much emissions did each of these swin
Anna007 [38]
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3 years ago
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