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uranmaximum [27]
3 years ago
7

A company projects an increase in net income of $30000 each year for the next five years if it invests $300000 in new equipment.

The equipment has a five-year life and an estimated salvage value of $100000. What is the annual rate of return on this investment?
Business
1 answer:
iren [92.7K]3 years ago
5 0

Answer:

Annual rate of return = 13%

Explanation:

Since the firm's net income increases by $30,000 per year, the cash flows per year = net income + depreciation costs

Depreciation costs = ($300,000 - $100,000) / 5 = $200,000 / 5 = $40,000

The cash flows generated by this investment are as follows:

Year 0 = -$300,000

Year 1 = $70,000

Year 2 = $70,000

Year 3 = $70,000

Year 4 = $70,000

Year 5 = $170,000 (including salvage value)

To calculate the project's rate of return (RoR) we can use an excel spreadsheet and the IRR function

=IRR (values,[guess])

=IRR (-300000,70000,70000,70000,70000,170000)

= 13%

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riadik2000 [5.3K]

Answer and Explanation:

The Preparation of analysis showing whether the company should eliminate the gloves and mittens line is shown below:-

Particulars           Continue                  Eliminate                Net Income

                                                                                     Increase (Decrease)

Sales                   $500,000                     0                           ($500,000)

Variable

expenses           $360,000                      0                            $360,000

Contribution

margin               $140,000                       0                             ($140,000)

Fixed costs       $148,000                   $36,000                     $112,000

Net income      ($8,000)                     ($36,000)                   ($28,000)

The analysis showing that the Carla Vista Corporation should manufacture gloves and mittens else there loss will be increased by $28,000

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3 years ago
Your company emphasizes the important of conserving (not wasting)
Fofino [41]
Your answere would be A, Use the Print option for two-sided printing.
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3 years ago
Services high in qualities have characteristics that the buyer can evaluate after purchase.
sergejj [24]

Services high in experience qualities have characteristics that the buyers can evaluate before purchase.

What is high quality of services?

When a customer's expectations are met, the service is said to be of high quality. Quality of service describes or measures a service's entire performance, especially the performance felt by network users, whether it be a cloud computing service, a phone service, or a computer network. The key to provide first-rate customer service is being pleasant. Try to welcome everyone with a smile at all times, and be considerate and friendly.

Businesses are considered to have good service quality when they meet or surpass expectations. Consider going to a fast food restaurant for dinner, where you can count on getting your food five minutes after placing your order. Your order is called minutes before you had anticipated it to be once you have got your drink and chosen a table.

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brainly.com/question/24279473

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4 0
1 year ago
An activity-based costing system is developed in four steps: a. Compute the predetermined overhead allocation rate for each acti
Andru [333]
<h3>Hello there!</h3>

Your question asks what order does a activity-based costing system work by.

<h3>Answer: b, c, a, d</h3>

The order:

1. b). Identify activities and estimate their total indirect costs.

2. c). Identify the allocation base for each activity and estimate the total quantity of each allocation base.

3. a). Compute the predetermined overhead allocation rate for each activity.

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The reason why the answer choice "b, c, a, d" is the correct answer because that's the correct order for the activity-based costing system.

The activity-based costing system first identifies the activities that are going on and find the indirect cost, then identifies the allocation base for the activities that are occurring to find the quantity of the allocation base, then solve the pre-determined rate of allocation for each activity, and finally get the indirect cost for the object.

<h3>I hope this helps!</h3><h3>Best regards,</h3><h3>MasterInvestor</h3>
8 0
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Answer:

Recurring is the answer.

Explanation:

8 0
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