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3 years ago

Which of the following would be considered a capital expenditure?

Business

1 answer:

Alborosie3 years ago

8 0

Answer:

B. Paying city inspection fees for new equipment

Explanation:

Capital expenditure is an expense incurred by the business to maintain its fixed assets with an objective to increase its efficiency. Any additions and improvements in fixed assets is an capital expenditure.

City inspection is required to evaluate the working condition of the asset and any fees paid for it, is a capital expenditure.

Interest payment on construction bonds, lease rental payments of assets and mortgage interest on asset is a liability payable in intervals and all they are operating expense and not considered to be capital expenditure.

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Option 4: Threats

Gala2k [10]

<u>Explanation:</u>

Walmart has been increasing its online retail operations and provides more promotions and offers such as free shipping. When Walmart offers product at such low prices compared to Target stores the company is forced to sell its products at competitive prices to stay in the business. To overcome this threat Target stores can also implement its online stores to minimize the threat and stay competitive.

Walmart has increased the business threat for target stores by opening new and convenient stores in the same place where Target stores are located. This reduces the business for Target stores. To be competitive Target stores have to increase its promotional and marketing activities.

7 0

3 years ago

A venture has net sales of $400,000, cost of goods sold of $200,000, operating expenses (selling, general, and administrative) o

Sphinxa [80]

Given:

Net sales = $400000

Cost of goods sold = $200,000

Operating expenses = $100,000

Interest expenses = $50,000

To find:

The operating profit margin

Solution:

To calculate the operating profit margin, first we have to find the operating profit.

Subtract your total operating expenses from gross profit to calculate operating profit.

That is, $\text{Operating profit}=\text{Sales (Revenue) - Cost of goods sold - Operating expenses}$ $\Rightarrow \$400000-\$200000-\$100000=\$100000$

Divide operating profit by gross revenue to calculate operating profit margin.

$\text{Operating profit margin} = \frac{\text{Operating profit}}{\text{Gross Revenue}}\times100$

$\Rightarrow\frac{100000}{400000}\times100=25\%$

Therefore, the Operating profit margin is 25%.

4 0

3 years ago

What do people purchase as a form of risk management to protect themselves from losing a lot of money in the event something hap

Gemiola [76]

Insurance: An arrangement to provide protection against a possible eventuality.

6 0

3 years ago

When tariffs are imposed, the losers include domestic consumers and the domestic government. foreign consumers and domestic prod

Maslowich

<span>When tariffs are imposed, the losers include domestic consumers and foreign producers. A tariff is a tax that is imposed on different imports or exports. When these taxes are added the consumers wanting to purchase the item are going to pay more for it because of the added tax. This also hurts foreign producers because their products cost more for those in the country they are being imported into making some people want to stay away from purchasing the item. </span>

6 0

3 years ago

Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.8 million ca

Phantasy [73]

Answer:

A a) Journal Entry for Precision Castparts

Debit Bank $39.8 million Credit Note Payable $39.8 million

b) Journal Entry for Midwest bank

Debit Note Receivable $39.8 million Credit Bank $39.8 million

B a) Journal Entry for Precision Castparts

Debit Interest Expense $796,000 Credit Interest Payable $796,000

b) Journal Entry for Midwest bank

Debit Interest Receivable $796,000 Credit Interest Income $796,000

C a) Journal Entry for Precision Castparts

Debit Note Payable $39.8 million Debit Interest Payable $796,000 Debit interest Expense $2,388,000 Credit Bank $42,984,000

b) Journal Entry for Midwest bank

Debit Bank $42,984,000 Credit Note Receivable $39.8 million Credit Interest Receivable $796,000 Debit interest Income $2,388,000

Explanation:

Interest up to 31 Dec 2021

Interest = 39,800,000*8% = $3,184,000*3/12 =$796,000

8 0

3 years ago