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love history [14]
3 years ago
12

Harrison Corporation is studying a project that would have an eight-year life and would require a $300,000 investment in equipme

nt which has no salvage value. The project would provide net operating income each year as follows for the life of the project: Sales $500,000 Less cash variable expenses 200,000 Contribution margin 300,000 Less fixed expenses: Fixed cash expenses $150,000 Depreciation expenses 37,500 187,500 Net operating income $112,500 The company's required rate of return is 10%. The payback period for this project is closest to:
Business
1 answer:
zheka24 [161]3 years ago
5 0

Answer:

The payback period for this project is closest to 2 years

Explanation:

Initial investment = $300,000

Sales = $500,000

Cash variable expenses = ($200,000)

Contribution margin = 300,000

Fixed cash expenses = $150,000

Depreciation expenses = $37,500

Total Fixed expenses: $150,000 + $37,500 = ($ 187,500 )

Net operating income = $112,500

Annual cash inflows = Net operating income + Depreciation

= $112,500 + $37,500

= $150,000

Payback period = Initial investment ÷ Annual cash inflows

= $300,000 ÷ $150,000 = 2 years

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Prior period adjustments to financial statements can result from: Multiple Choice Changes in estimates of salvage value. Materia
AveGali [126]

The answer is  material math error.

An adjusting entry is essentially a bookkeeping modification that improves the accuracy of the financial statements by reflecting the revenue and spending on an accrual basis, which is typically but not always the case. At the conclusion of the accounting period, adjustments are made. This might happen towards the end of the month or at the end of the year.

Prior period adjustments are errors or mistakes committed in the prior reporting period. These mistakes must be remedied or eliminated by taking suitable corrective action. Prior period items include factual errors, arithmetic errors, and errors in applying accounting rules.

Therefore, material math error is the correct option.

To know more about adjustment to financial statements click here:

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4 0
2 years ago
Quantitative Problem 1: Hubbard Industries just paid a common dividend, D0, of $1.50. It expects to grow at a constant rate of 2
mr Goodwill [35]

Answer:

The current price of Hubbard's common stock is <u>$25.50</u>.

Explanation:

This can be calculated using the Gordon growth model (GGM) formula that assumes growth is dividend will be constant as follows:

P = D1/(r - g) ............................ (1)

Where,

P = Current stock price = ?

D1 = Next dividend =  D0 * (1 + g) = $1.50 * (1 + 2%) = $1.53

r = required return = 8%, or 0.08

g = growth rate = 2%, or 0.02

Substituting the values into equation (1), we have:

P = $1.53 / (0.08 - 0.02) = $25.50

Therefore, the current price of Hubbard's common stock is <u>$25.50</u>.

7 0
3 years ago
Jaronda founded Diamond Communications Inc. in 1993. Ten years later, the company went public. Despite Jaronda's death in 2005,
Solnce55 [7]

Answer: C. separation of legal ownership and management control

Explanation: Public traded company can go on with their operation undisturbed when the founder dies, because there is separation of ownership from management of the company.

Public traded companies usually have a board which management report to, the board is the highest decision making body in the company.

7 0
3 years ago
Dividing responsibility among some of the team members is effective delegation
konstantin123 [22]

Answer:true

Explanation:

Because dividing tasks get more accomplished faster

5 0
2 years ago
Economics is primarily the study of__________.
Julli [10]

Answer:

Option (c) is correct.

Explanation:

Economics is the study of the choices that we have to make from the limited available resources. We know that the human wants are unlimited and the resources to satisfy these wants are limited. So, we have to use these scarce resources in a manner which gives the maximum utility from the resources. The scarce resources have to be rationally managed.

7 0
2 years ago
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