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AveGali [126]
3 years ago
5

Watson Corporation is considering buying a machine for $25,000. Its estimated useful life is 5 years, with no salvage value. Wat

son anticipates annual net income after taxes of $1,500 from the new machine. What is the accounting rate of return assuming that Watson uses straight-line depreciation and that income is earned uniformly throughout each year
Business
1 answer:
LuckyWell [14K]3 years ago
7 0

Answer:

12%

Explanation:

Accounting rate of return = Average net income / Average book value

Average book value = (Cost of equipment - salvage value) / 2

Average book value =  ($25,000 - 0) / 2 = $12,500

AAR = $1500 / $12,500 = 0.12 = 12%

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An electronics firm is currently manufacturing an item that has a variable cost of $.50 per unit and a selling price of $1.00 pe
Dmitry [639]

Answer: The company should not buy the new equipment

Explanation:

For the 1st case:

Revenue = Selling price × Number of units

= 1 × 30000

= $30,000

Total cost = Fixed cost + Variable cost

= 14000 + (0.5 × 30000)

= 14000 + 15000

= $29000

Profit = Revenue - Cost

= $30000 - $29000

= $1000

For the 2nd case:

Revenue = Selling price × Number of units

Revenue = Selling price × Number of units

= 1 × 50000

= $50,000

Total cost = Fixed cost + Variable cost

= 20000 + (0.6 × 50000)

= 20000 + 30000

= $50000

Profit = Revenue - Cost

= $50000 - $50000

= $0

Based on the calculation above, the company should not buy the new equipment as no profit will be made while currently a profit of $1000 is made.

3 0
3 years ago
Monetary policy could be procyclical if the Federal Reserve: a) is late recognizing that a recession has begun and conducts expa
gladu [14]

A) is late recognizing that a recession has begun and conducts expansionary monetary policy.

6 0
4 years ago
Which is better Window 11 or 10?
katen-ka-za [31]

Answer:

Window 10 is better then 11, so i recommand skip 11

Explanation:

7 0
2 years ago
XYZ Inc.'s cost formula for its supplies cost is $968 per month plus $8 per frame. For the month of November, the company planne
zaharov [31]

Answer: $528 favorable

Explanation:

The Spending variance for supplies shoes the difference between what the company thought it would spend on supplies and what it actually spends.

Spending variance on supplies = Actual costs - Budgeted costs

Budgeted cost:

= 968 + 8 * 470 frames

= 968 + 3,760

= $4,728

Spending variance on supplies:

= 4,200 - 4,728

= $528 favorable

<em>Variance is favorable when the Budgeted costs are higher than actual costs. </em>

8 0
3 years ago
What is the main difference between a vertical hierarchy of authority and a horizontal specialization?A. Horizontal specializati
AlekseyPX

Answer:

B. Vertical hierarchy shows who reports to whom and horizontal specialization shows the different jobs.

Explanation:

According to the definition of a vertical hierarchy, business features a pyramidical top-down structure. On the other hand, horizontal hierarchy means a business feature with a flat structure. In the case of a vertical hierarchy, the owner stands on the highest point, and ultimately everything has to be structured by maintaining the chain of command. However, in the case of horizontal hierarchy, people are distributed according to their specialty. Moreover, there is a different task for each one. This method permits workers to feel sceptered. As a result, they will create vital choices while not having approval from a manager. That is why, just in the case of Horizontal, there is some freedom for the workers. Nevertheless, in the vertical hierarchy, there must be approval from the manager.

7 0
3 years ago
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