Answer:
The simple rate of return on the investment is closest to: C. 10.6%
Explanation:
In Hartong Corporation:
Increasing net income = Increase sales revenues - Cash operating expenses - Annual depreciation expense = $185,000 - $89,000 - $52,000 = $44,000
This is the net income from the equipment per year
Return on the investment (ROI) is calculated by using following formula:
ROI = (Net income/Cost of investment
)x 100%
Cost of investment = Cost of equipment = $416,000
ROI = ($44,000/$416,000) x 100% = 10.6%
The true statement out of all is
B) Georgeland has both an absolute and a comparative advantage in producing clothing.
Explanation:
This is because Absolute advantage is when one firm or a producer is able to produce more of a product using less resources or less time or more of the product in the same resources or same time as the other.
Comparative advantage is found out at the added bonus of having the product be as viable as it is advantageous which means that the producer could also be making another product and would have the advantage in that too so either one of them is equally profitable.
Answer:D. 0.05 x (l-t*) = 0.07
Explanation: The break even tax rate is the tax rate at which industry players don't find it advantageous or disavantageous to invest in an economy, any tax rate higher than the break even tax rate will cause investors to loss certain amount of profits.
A tax rate below the break even tax rate will cause investors to want to make investment decisions as it will be beneficial and profitable to invest more money into the economy.
Calculation:
7/100=5/100(I-t*),the break even tax rate can be expressed as
=0.07=0.05*(I-t).
Answer: Old machine should be replaced.
Explanation:
The variable manufacturing cost will reduce by:
= 624,000 - 524,000
= $100,000
Over a period of 5 years this will be:
= 100,000 * 5
= $500,000
Selling the old machine would bring in $32,000:
= 500,000 + 32,000
= $532,000
The cost of the new machine would reduce this gross benefit by:
= 532,000 - 455,100
= $76,900
<em>Net income will increase by a total of $76,900 over the 5 year period if the new machine is bought so it should be bought. </em>
It would have to be 20000
