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antoniya [11.8K]
3 years ago
6

Storax Manufacturing purchases equipment for $50,000. The equipment has an expected life of 10 years and an estimated salvage va

lue of $2,000. Storax expects the new equipment to generate annual cost savings of $8,000. What is the payback period for the equipment
Business
1 answer:
Mashcka [7]3 years ago
8 0

Answer:

6.25 years

Explanation:

The formula to compute the payback period is shown below:

= Initial investment ÷ Net cash flow

where,  

The Initial investment is $50,000

And, the net cash flow is $8,000

Now put these values to the above formula  

So, the value would equal to

= ($50,00) ÷ ($8,000)

= 6.25 years

All other information which is given is not relevant. Hence, ignored it

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A change in the quantity demanded of a good is: a. represented by a shift to a new demand curve. b. represented by a movement al
Radda [10]

Answer:

It's represented by a movement along the demand curve

3 0
3 years ago
A delivery truck costing $25,000 is expected to have a $1,500 salvage value at the end of its useful life of four years or 125,0
Helga [31]

Answer:

a.

Depreciation expense year 2 Straight line = $5875

b.

Depreciation expense year 2 Double declining = $6250

c.

Depreciation expense year 2 units of activity = $5264

Explanation:

a.

Straight line method is a depreciation method that charges a constant depreciation expense through out the useful life of the asset. Straight line depreciation per year is,

Straight line depreciation = (Cost - Salvage value) / Estimated useful life

Straight line depreciation = (25000 - 1500) / 4    =  $5875 per year

Straight line rate = 100% / 4 = 25%

b.

Double declining balance is an accelerated method of depreciation that charges more depreciation in the initial years and less in later years. Double declining balance depreciation is calculated as follows,

Depreciation expense = 2 * Straight line rate * Book value at start of the period

Depreciation expense year 1 = 2 * 0.25 * 25000     = $12500

Book value at start of year 2 = 25000 - 12500 = $12500

Depreciation year 2 = 2 * 0.25 * 12500  =  $6250

c.

The units of production method charges depreciation based on the activity for which asset is used as a proportion of the estimated useful life in terms of activity.

Depreciation expense year 2 = (28000 / 125000) * (25000 - 1500)

Depreciation expense year 2 = $5264

7 0
3 years ago
On January 1, 2004, Kay Inc. issued its 10% bonds in the face amount of $400,000, which mature on January 1, 2014. The bonds wer
DaniilM [7]

Answer:

Unamortized discount is $43,700

Explanation:

Unamortized bond discount=original bond discount-amortization to date

original bond discount is $46,000

Amortization =interest  payable-interest expense

interest payable=$400,000*10%*6/12

                            =$20,000

Interest expense=$354,000*10%*6/12

                             =$17,700

amortization of discount=$20,000-$17,700

                                        =$2300

unamorized bond discount=$46000-$2300

                                            =$43,700

The unamorized bond discount at the end of the first six months is $43,700

                     

3 0
3 years ago
Hiller Company uses the FIFO method of inventory costing because it wants to maintain a high current ratio during periods of
Vilka [71]

The answer is during the period of inventory valuation. It is the cost linked with an entity’s inventory at every end of the accounting period. The FIFO method means first in, first out technique which undertakes that the first product that was obtained are also the first ones to be retailed or sold.

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3 years ago
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Which action can hurt your credit score? I. Paying your phone bill late. II. Taking the bus to work. III. Maxing out several cre
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Paying your phone bill late and maxing out your credit card can hurt your credit score. 
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