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castortr0y [4]
2 years ago
6

The expected average rate of return for a proposed investment of $4,250,000 in a fixed asset, using straight-line depreciation,

with a useful life of 20 years, no residual value, and an expected total net income of $8,500,000 over the 20 years is:_________ (round to two decimal points).
a. 10.00%
b. 20.00%
c. 40.00%
d. 1.00%
Business
1 answer:
Sphinxa [80]2 years ago
4 0

Answer:

A

Explanation:

Average rate of return is a capital budgeting method. It is used to determine if a firm should invest in a project or should not invest in a project

average rate of return = average net income / average cost of investment

average net income = (total net income - depreciation) / useful life

(8,500,000 - $4,250,000) / 20 = 212,500

Average cost of investment =( beginning book value of the investment - ending book value of the investment) / 2

($4,250,000 - 0) / 2 = 2,125,000

ARR = 212,500 / 2125,000 = 0.1  = 10%

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Jamie is about to go to work for Potpourri, a store that sells various bed and bath accessories. Though technically a chain, Pot
Leokris [45]

Answer: A. get along well and share many of the same views, including admiration for the company founder.

Explanation:

The options to the question are:

A. get along well and share many of the same views, including admiration for the company founder.

B. enjoy friendly relations, but differ on many things, including work-related matters.

C. have very little connection to one another.

D. tend to share a lot of opinions, including a dislike for each other.

E. are free spirits, each of them his or her own little island.

From the question, we are informed that Jamie is about to go to work for Potpourri, a store that sells various bed and bath accessories.

We are further told that although technically it's a chain, Potpourri currently has just three stores, all within an hour of each other in the Midwestern United States.

The type of organizational culture Jamie is likely to encounter at Potpourri is one in which employees get along well and share many of the same views, including admiration for the company founder. This is because the stores are few and close to each other.

5 0
3 years ago
Sysco Corporation, formed in 1969, is the largest global distributor of food service products, serving over 500,000 restaurants,
Leona [35]

Answer:

Sysco Corporation

Journal Entries:

a. Debit Buildings $450

Debit Equipment $234

Credit Cash $684

To record the purchase of long-term assets for cash.

b. Debit Cash $119

Credit Short-term Note Payable $119

To record the funds borrowed from a bank.

c. Debit Accounts receivable $23,358

Debit Cash $30,813

Credit Service Revenue $54,171

To record the provision of service to customers on account and for cash.

d. Debit Accounts Payable $129,574

Credit Cash $129,574

To record the payment on account.

e. Debit Inventory $41,983

Credit Accounts Payable $41,983

To record the purchase of merchandise on account.

f. Debit Salaries Expense $5,240

Credit Cash $5,240

To record the payment of payroll during the year.

g. Debit Cash $19,043

Credit Accounts receivable $19,043

To record the cash received from customers on account.

h. Debit Delivery Vehicles Expense $1,600

Credit Cash $1,600

To record the purchase of fuel for the delivery vehicles.

i. Debit Dividend $598

Credit Dividends Payable $598

To record the declaration of dividend.

j. Debit Utilities Expense $126

Credit Cash $93

Credit Utilities Payable $33

To record the Utilities expenses incurred during the year.

Explanation:

Transactions Analysis:

a. Buildings $450  Equipment $234  Cash $684

b. Cash $119 Short-term Note Payable $119

c. Accounts receivable $23,358 Cash $30,813 Service Revenue $54,171

d. Accounts Payable $129,574 Cash $129,574

e. Inventory $41,983 Accounts Payable $41,983

f. Salaries Expense $5,240 Cash $5,240

g. Cash $19,043 Accounts receivable $19,043

h. Delivery Vehicles Expense $1,600 Cash $1,600

i. Dividend $598 Dividends Payable $598

j. Utilities Expense $126 Cash $93 Utilities Payable $33

5 0
3 years ago
. Stock X has a beta of 0.5 and Stock Y has a beta of 1.5. Which of the following statements must be true, according to the CAPM
KiRa [710]

Answer:

c. If the expected rate of inflation increases but the market risk premium is unchanged, the required returns on the two stocks should increase by the same amount

This statement is correct because an increase in inflation is a risk which will be reflected by an increase in the risk free rate. Also increase Beta is that sensitivity of the stocks to the market risk premium, and having different betas does not affect the the increase in expected rate of return caused by inflation.

Explanation:

a. If you invest $50,000 in Stock X and $50,000 in Stock Y, your 2-stock portfolio would have a beta significantly lower than 1.0, provided the returns on the two stocks are not perfectly correlated

This statement is wrong because if you invest 50,000 in stock X and 50, 000 in stock B you will have a beta of 1

50,000/100,000=0.5

(0.5*1.5)+(0.5*0.5)=0.75+0.25=1

b. Stock Y's realized return during the coming year will be higher than Stock X's return

This statement is wrong because although stock y's expected return will be higher because it has a higher beta, realized returns cannot be decided beforehand and will have to wait and see how the market reacts

d. Stock Y's return has a higher standard deviation than Stock X.

This statement is wrong because we do not have any information about any of the stocks standard deviation and knowing the betas is not enough to find the standard deviation.

If the market risk premium declines, but the risk-free rate is unchanged, Stock X will have a larger decline in its required return than will Stock Y.

This statement is wrong because stock y has a bigger beta than stock x which means that when the risk premium declines stock y will have a larger decline.

5 0
3 years ago
Aziz is hired as a Nanny even though he doesn't have any experience with it yet. Martina is a Mental Health Counselor who works
Marysya12 [62]

Answer:

entry-level job

full-time job

salaried job

job with benefits

Explanation:

got it right on ed

7 0
2 years ago
Read 2 more answers
__________is the positioning strategy of providing a product or service that is sufficiently different from competitors' offerin
Rainbow [258]

<u>Differentiation</u> is the positioning strategy of providing a product or service that is sufficiently different from competitors' offerings that customers are willing to pay a premium price for it.

<u>Explanation:</u>

Market differentiation or simply differentiation in economics and marketing is the method of separating a market or service from others, to make it more appealing to a particular target market. It includes differentiating it from the products of competitors, as well as the products of a company's own. An illustration of this is a lawn-care service that is expected to do weekly maintenance costs less than any other advertised price. Differentiation between products is important in today's financial environment.

3 0
3 years ago
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