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
zhenek [66]
3 years ago
13

The Green Fiddle is considering a project with sales of $86,800 a year for the next four years. The profit margin is 6 percent,

the project cost is $97,500, and depreciation is straight-line to a zero book value over the life of the project. The required accounting return is 10.8 percent. This project should be _____ because the AAR is _____ percent.
Business
1 answer:
-Dominant- [34]3 years ago
8 0

Answer:

This project should be rejected  because the AAR is 10.68 percent.

Explanation:

The accounting rate of return of the project needs to computed,compared with the required accounting rate of return  in order to decide whether the project should accepted or rejected:

Profit margin=$86,800*6%=$5208

Average operating assets=($97,500+$0)/2=$48.750

Accounting rate of return=profit margin/average operating assets*100

Accounting rate of return=$5,208/$48,750*100=10.68%

The project accounting rate of return is lower than the required accounting rate of return,hence the project should be rejected.

You might be interested in
Assume that the interest rate on borrowings in india is 1 percent while the interest rate on bank deposits in a u.s. bank is 6 p
BARSIC [14]
Those who try to benefit from a carry trade are hoping to borrow money at a low interest rate so that they can invest in something that will provide a higher return. People commonly do this between different foreign exchange markets to make the most on their return from investing in different country currencies. 
3 0
3 years ago
Which of the following is a challenge faced by developing nations? A. Growing population B. Declining population C. Lack of effo
DedPeter [7]
A growing population
7 0
3 years ago
Read 2 more answers
Molly Madison received "The Employee of the Month" Award at Internal Workings Remodeling Service in April. Molly would be consid
Tems11 [23]

Answer: Internal environment

Explanation: The internal environment is made of the components inside the company comprising of existing workers, administration, atmosphere, tools, job procedures and mostly corporate culture which has the capacity of affecting the workers' attitudes and conclusions of the company. In this case, Molly Madison is considered a part of the internal environment of the internal workings as she received the award for employee of the month.

4 0
3 years ago
A small producer of machine tools wants to move to a larger building, and has identified two alternatives. Location A has annual
xenn [34]

Answer:

Location A is superior to up 40 units. From there Location B is better

Explanation:

Giving the following information:

Location A:

Fixed costs of $100,000

Variable costs of $13,000 per unit.

Location B:

Fixed costs of $300,000.

Variable costs of $8,000 per unit.

The finished items sell for $18,000 unit.

Contribution margin Location A= 18000-13000= 5,000

Contribution margin Location B= 18000 - 8000= 10,000

Income formula location A= 5000*Q - 100000

Income formula location B= 10000*Q- 300000

5000*Q - 100000= 10000*Q - 300000

200000= 5000Q

Q= 40 units

Location A is superior to up 40 units. From there Location B is better.

6 0
3 years ago
PLZZZZZ HELP!! 20 POINTS!!
Sphinxa [80]

Answer:

i say B or D

Explanation:

out of all of them, the most reasonable would be the money you make from the partnership.

7 0
2 years ago
Other questions:
  • Mercantile corporation has sales of $2,000,000, variable costs of $1,100,000, and fixed costs of $750,000. mercantile’s degree o
    14·1 answer
  • Tootsie Roll Industries is engaged in the manufacture and sale of candy. Major products include Tootsie Roll, Tootsie Roll Pops,
    10·1 answer
  • One approach to organization is putting activities that are similar under one person. ________ called this ""unity of direction.
    7·1 answer
  • In March, stockholders of Herbalife Nutrition approved a 3-for-2 stock split. After the split, how many shares of Herbalife stoc
    10·1 answer
  • Bunnell corporation is a manufacturer that uses job-order costing. on january 1, the company’s inventory balances were as follow
    8·1 answer
  • It is important to use real rather than nominal gdp figures when making comparisons of output across time periods because the re
    9·1 answer
  • An economy has 100 people divided among the following groups: 25 have full-time jobs, 20 part-time jobs, 5 has two part-time job
    14·1 answer
  • How does the fed encourage banks to loan more money?
    11·1 answer
  • What is time consuming in business communities​
    15·1 answer
  • When shipments from a number of sources are combined into one larger shipment going to a single location, the operation is known
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!