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Katen [24]
3 years ago
7

Metcalf Company leases a machine from Vollmer Corp. under an agreement which meets the criteria to be a finance lease for Metcal

f. The six-year lease requires payment of $170,000 at the beginning of each year, including $25,000 per year for maintenance, insurance, and taxes. The incremental borrowing rate for the lessee is 10%; the lessor's implicit rate is 8% and is known by the lessee. The present value of an annuity due of 1 for six years at 10% is 4.79079. The present value of an annuity due of 1 for six years at 8% is 4.99271. Metcalf should record the leased asset at:________
a. $848,760
b. $814,435
c. $723,943
d. $694,665
Business
1 answer:
tresset_1 [31]3 years ago
4 0

Answer:

the lease asset is $723,943

Explanation:

The computation of the lease asset is shown below;

= (Lease payment - per year maintenance charges) × present value of an annuity due of 1 for six years at 8%

= ($170,000 - $25,000) × 4.99271

= $145,000 × 4.99271

= $723,943

hence, the lease asset is $723,943

The same would be considered

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Tju [1.3M]

Answer:

$5.59

Explanation:

Calculation to determine the value of the entity multiple of Company X in Year 1

Using this formula

Entity multiple=Market value / EBITDA

Let plug in the formula

Entity multiple=$99,450/$17800

Entity multiple=$5.59

Therefore the value of the entity multiple of Company X in Year 1 will be $5.59

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3 years ago
Diseconomies of scale means that a company is too small to purchase in bulk and is unable to lower costs.
Vinvika [58]

Answer:

Diseconomies of scale are when production output increases with rising marginal costs. ... Fixed costs do not change with increases/decreases in units of production volume, while variable costs are solely dependent, which results in reduced profitability. They show how well a company utilizes its assets to produce profit.

Explanation:

It's true.

3 0
3 years ago
Read 2 more answers
Ian Sanders offered to sell his car to Beth Jones for $5,000. Subsequently, Beth demanded that he provide new seat covers for th
Sergeeva-Olga [200]

This question is incomplete because the options are missing; here is the complete questions:

Ian Sanders offered to sell his car to Beth Jones for $5,000. Subsequently, Beth demanded that he provide new seat covers for the car as she was paying a rather heavy price for the car. Beth's response represents a(n) ________.

A. Inquiry regarding terms

B. Rejection of the offer

C. Conditional acceptance of the offer

D. Additional term

The correct answer to this question is D. Additional term

Explanation:

In a contract, the terms refer to the specific conditions or obligations the parties involved accept. These terms are usually registered in a document as not following the terms has legal consequences. In the case presented, the answer of Beth represents an additional term because the purpose of her answer is to include a new condition or obligation that the seller of the car should accomplish as part of the agreement between seller and buyer.

3 0
3 years ago
Dominique owns an international grocery store, the World Food Market, where customers can purchase foods and canned goods from o
Svet_ta [14]

Answer:

Imports

Explanation:

Dominique owns an international grocery store, the World Food Market, where customers can purchase foods and canned goods from other countries. World Food Market is an example of a company that imports. Dominique imports products from different countries and make them available to its customers on their shelves. They have to buy those products from different sources. For this purpose, they have to put large amount of efforts in order to contact the foreign vendors and get their product imported in their country and ultimately at their store by spending costs and efforts. By importing products from other country, they can provide large product assortment to their customers.

5 0
3 years ago
Exercise 12-04 a-b (Video) McGill and Smyth have capital balances on January 1 of $54,000 and $48,000, respectively. The partner
dezoksy [38]

Question Continuation

Complete the schedule showing the distribution of net income, assuming net income is $54,000

Answer:

McGill takes $31,540

Smyth takes $22,460

Total: $54,000

Explanation:

Salary Allowance

McGill: $19,000

Smyth: $14,000

Total Salary Allowance = $33,000

Interest Allowance

McGill: $54,000 x 10% = $5,400

Smyth: $48,000 x 10% = $4,800

Total Interest Allowance = $5400 + $4,800 = $10,200

Total salaries and interest

McGill =$24,400 ($19,000 + $5,400)

Smyth: $18,800 ($14,000 + $4,800)

Sum = $43,200

Remaining income

McGill = $10,200 x 70% = $7,140

Smyth: $10,200 x 30% = $3,060

Total division between McGill and Smyth

McGill takes $31,540

Smyth takes $22,460

Total: $54,000

5 0
3 years ago
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