Answer: ARR = Average profit/Initial outlay x 100
ARR = $19,000/$250,000 x 100
ARR = 7.60%
The correct answer is C
Depreciation = Cost - Residual value/Estimated useful life
= $250,000 - $20,000/5 years
= $46,000 per annum
Average profit = Total profit/No of years
= $325,000/5
= $65,000
$
Average profit 65,000
Less: Depreciation 46,000
Average profit after depreciation 19,000
Explanation: In determining the accounting rate of return of the investment, there is need to calculate depreciation using straight line method. The amount of depreciation would be deducted from the average profit so as to obtain the average profit after depreciation. The average profit would be divided by the initial outlay in order to obtain the accounting rate of return.
Answer: Wages are flexible if the economy is self-regulating.
Explanation:
Classical economists believe that the economy is self-regulating. This means that if the economy is not at equilibrium, it will return to equilibrium if it is left without interference.
For this to happen, inputs such as wages have to flexible to enable them to adjust to market conditions and thus take the Economy back to equilibrium.
For instance, if there is a recession, wages will reduce so that the prices that the producers can charge will reduce as well which will enable supply to match demand and bring the economy back to equilibrium.
Answer:
$637,000
Explanation:
The computation of the total investment securities reported is shown below:
= ABC Co. bonds amortization cost for year 2015 + DEF Co fair value for year 2015 + GEH Inc fair value for the year 2015 + IJK Inc fair value for the year 2015 + LMN co stock fair value for the year 2015
= $367,500 + $48,000 + $47,000 + $44,000 + $130,500
= $637,000
We simply applied the above formula
Answer:
A financial system functions as an intermediary and facilitates the flow of funds from the areas of surplus to the areas of deficit. It is a composition of various institutions, markets, regulations and laws, practices, money managers, analysts, transactions, and claims & liabilities.May 29, 2016
(can u flag me)
Answer:
$444,444.44
Explanation:
Larry's life insurance corporation is trying to sell an investment policy that will pay you and your heirs a total amount of $32,000 per year
The required return on this investment is 7.2%
= 7.2/100
= 0.072
Since the cash flow is a perpetuity then, the amount that will be paid for the policy can be calculated as follows
PV= C/r
= $32,000/0.072
= $444,444.44
Hence the amount of money that will be paid for the policy is $444,444.44
