1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Vladimir79 [104]
2 years ago
6

Augustus Company is considering investing in new equipment. Based on the following, what is the Average Annual Operating Income

(as in the Accounting Rate of Return calculation)?
Estimated Cost of New Equipment $500,000
Useful life in years 5
Estimated Residual Value $50,000
Expected New Cash Inflows over life of asset $700,000
Business
1 answer:
sladkih [1.3K]2 years ago
3 0

Answer:

$50,000

Explanation:

Estimated Cost of New Equipment = $500,000

Useful life in years = 5

Estimated Residual Value = $50,000

Expected New Cash Inflows over life of asset = $700,000

Annual depreciation expense = (Estimated Cost of New Equipment-Estimated Residual Value)/Useful life in years

= ($500,000 - $50,000) / 5

= $450,000 / 5

= $90,000

Average annual cash flow = Expected New Cash Inflows over life of asset/ Useful life in years

= $700,000/5

= $140,000

Average annual operating income = Average annual cash flow - Annual depreciation expense

= $140,000 - $90,000

= $50,000

You might be interested in
Generally the preferred method of making decisions within an organization is the
Lerok [7]

Generally the preferred method of making decisions within an organization is the rational model. This model is the preferred method for making decisions but generally it is pretty unrealistic for a company to obtain and adapt into their organization. This model tries to combine rational with structured deicsion aking for the best possible outcome.

4 0
3 years ago
Springfield mogul Montgomery Burns, age 80, wants to retire at age 100 so he can steal candy from babies full time. Once Mr. Bur
masha68 [24]

Answer:

Springfield mogul, Montgomery Burns

How large of an annual deposit must be made to fund Mr. Burns retirement plans:

= $94,644,751.67

Explanation:

a) Data and Calculations:

Age of Mr. Burns now = 80 years

Retirement age = 100 years

Annual withdrawal at the beginning of each year for 10 years = $500 million

Special offshore account pays interest = 18% annually

Investment for funding retirement:

Deposits = 20 equal end-of-the year deposits in the same special offshore account above.

b) Calculation of Future value of annual deposit after 20 years:

FV (Future Value) $13,877,572,093.01

PV (Present Value) $2,651,510,914.01

N (Number of Periods) 10.000

I/Y (Interest Rate) 18.000%

PMT (Periodic Payment) $500,000,000.00

Starting Investment $0.00

Total Principal $5,000,000,000.00

Total Interest $8,877,572,093.01

c) Calculation of Annual Deposit to reach the future value target of $13,833,567,810.87:

FV (Future Value) $13,877,567,810.87

PV (Present Value) $506,609,362.98

N (Number of Periods) 20.000

I/Y (Interest Rate) 18.000%

PMT (Periodic Payment) $94,644,751.67

Starting Investment $0.00

Total Principal $1,892,895,033.42

Total Interest $11,984,672,777.45

d) Mr. Burns will need to contribute $94,644,751.67 at the end of each period to reach the future value of $13,877,572,093.01.  Both the future value of deposits of $13,877,567,810.87  and the annual periodic payment of $94,644,751.67  are determined using online financial calculator.

4 0
3 years ago
Sales for the last four months of the year for a company are listed below. What is the average of the sales for these four month
vovikov84 [41]
December i think, pretty sure i guess
6 0
3 years ago
Read 2 more answers
Armando has a summer job hand-dyeing shirts that will be sold on the boardwalk. He is paid $5.00 per shirt. Armando is being pai
netineya [11]

Answer:

Pay for Performance

Explanation:

Pay for Performance is the strategy which is being referred to as the pay strategy where the evaluations or computations of the individual or the business performance have the influence on the pay amount bonuses or the increases provided to each and every employee.

So, in this case, the person is paid on the performance of the person as he will be paid on the $5 per shirt.

7 0
3 years ago
Based on the information given, indicate whether the following industry is best characterized by the model of perfect competitio
alina1380 [7]

Answer:

a- monopolistic competition

b- perfect competition

c- monopoly

d- oligopoly

Explanation:

Industry A is a monopolistically competitive industry

Industry B is a perfectly competitive industry

Industry C is a monopoly industry

Industry D is an oligopoly industry

6 0
3 years ago
Other questions:
  • Aqua Ltd issues a prospectus inviting the public to subscribe for 30 million ordinary shares of $2.00 each. The terms of the iss
    5·1 answer
  • A= The amount of tangible assets contributed by the new partner into the partnership
    14·1 answer
  • When stock prices declined during the great recession, it caused aggregate demand to decrease because?
    6·1 answer
  • "Scott Manufacturing Co.'s static budget at 10,000 units of production includes $40,000 for direct labor and $4,000 for electric
    10·1 answer
  • Suppose the following information: The cost of a full-page color ad in the U.S. national edition of The Wall Street Journal (new
    9·1 answer
  • When a potential business owner asks, "How can I improve on this?" it is an example of _________
    10·1 answer
  • An inexperienced accountant for Cheyenne Corp. showed the following in the income statement: income before income taxes $371,000
    13·1 answer
  • If you were charged $1152 in taxes on a $2560 purchase. What percent tax were you charged
    11·1 answer
  • Two countries trade with each other regularly. Country A has a strong economy and buys
    7·2 answers
  • To make sure it has enough employees on hand during the busy holiday season, Target plans to hire thousands of temporary, season
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!