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kakasveta [241]
2 years ago
5

Diamond Company is considering investing in new equipment that will cost $1,400,000 with a 10-year useful life. The new equipmen

t is expected to produce annual net income of $90,000 over its useful life. Depreciation expense, using the straight-line rate, is $140,000 per year.
Instructions:
Compute the cash payback period.
Business
1 answer:
ivolga24 [154]2 years ago
6 0

Answer:

the cash payback period is 6.09 years

Explanation:

The computation of the cash payback period is shown below:

= Initial Investment  ÷ Net annual cash inflow

= $1,400,000 ÷ $230,000

= 6.09

Now the net annual cash flow is  

. Net operating income $90,000.00

Add: Depreciation   $140,000.00

Net annual cash inflow   $230,000.00

Hence, the cash payback period is 6.09 years

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3 years ago
Marlow Company purchased a point of sale system on January 1 for $5,800. This system has a useful life of 5 years and a salvage
xz_007 [3.2K]

Answer: $1392

Explanation:

The depreciation rate under straight line is =1/5=0.2

The depreciation rate under double declining is = 0.2 × 2 = 0.4

Depreciation expense for the first year = 0.4 × $5800 = $2320.

At the beginning of year two, net book value = $5800 - $2320 = $3480

Depreciation expense for year two = 0.4 × $3480 = $1392

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3 years ago
Look at the following financial ledger which items listed on the ledger represent credits
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The answer is B. Gift and online auction I hope this helps

Explanation:

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3 years ago
Classify each of the ofllowing as either a policy instrument or an intermediate target, and explain why?
Solnce55 [7]

Answer: The answers are given below

Explanation:

An intermediate target is a variable this isn't controlled directly under the central bank, but one that has a quick response to policy actions. e.g money supply.

A policy instrument is a tool used to manipulate a variable in the economy and achieve a desired objective. e.g. tax rates, interest rates, subsidies etc.

a. The ten-year Treasury bond rate

It is an intermediate target because isn't controlled directly under the central bank but can be linked to an activity in the economy.

b. The monetary base

This is a policy instrument because used to manipulate a variable in the economy and achieve a desired objective.

c. Ml

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d. The fed funds rate

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5 0
3 years ago
A project is expected to generate annual revenues of $132,100, with variable costs of $80,200, and fixed costs of $20,700. The a
Ludmilka [50]

Answer:

$21,943

Explanation:

Calculation to determine the annual operating cash flow

Using this formula

Operating Cash Flow =(Annual Revenue-Variable costs - Fixed costs)×(1-Tax rate)+( Annual depreciation×Tax rate )

Let plug in the formula

Operating Cash Flow =[ ($132,100 - $80,200 - $20,700) x (1 - 0.35)]+ ($4,750 x 0.35)

Operating Cash Flow =

Operating Cash Flow =($31,200×0.65)+$1,663

Operating Cash Flow =$20,280+$1,663

Operating Cash Flow =$21,943

Therefore the annual operating cash flow is $21,943

7 0
3 years ago
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