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Katena32 [7]
3 years ago
15

Lazar Corporation is evaluating a proposal to invest in a machine costing $89,000. The machine has an estimated useful life of t

en years, and an estimated salvage value of $14,000. The machine will increase the company's net income by approximately $9,600 per year. All revenue and expenses other than depreciation will be received and paid in cash.
Required:
1. The expected rate of return on average investment of the machine is ____________.
a. 10.0%
b. 48.0%
c. 17.0%
d. 18.6%
Business
1 answer:
tatuchka [14]3 years ago
6 0

Answer:

Option D is correct

Expected rate of return = 18.6%

Explanation:

The expected rate of return is the proportion of average investment that is earned as income . It is calculated as follows:

Rate of return on investment = average return / Average investment

Average investment = (Initial cost + salvage value)/ 2

Average investment = 89,000 +14,000/ 2= 51500

Net income = $9,600

Expected rate of return =  9,600/51,500×  100

                               = 18.6%

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Elden [556K]

Answer: Company Pays $1640

Carol Bryd pays $410

Explanation:

The total bill is $2300 and the deductible needs to be taken out.

$2300-$250

=$2050

Company Payment.

Company Pays 80% which translates to 0.8

0.8*2050

= $1640 is the company Payment.

Carol then pays the difference which is

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Carol pays $410

6 0
3 years ago
Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio'
MA_775_DIABLO [31]

Answer:

The new portfolio beta is 1.31 rounded off to two decimal places.

Explanation:

The portfolio beta is a function of the sum of the weighted average betas of the individual stock's that form up the portfolio. The portfolio beta is calculated using the following formula,

Portfolio beta = wA * Beta of A + wB * Beta of B + ... + wN * Beta of N

Where,

  • w is the weightage of each stock in the portfolio

The beta of the portfolio when one stock with a beta of 1 is sold is,

The sum of individual stock betas for 19 stocks is = 20 * 1.31  -  1 * 1  = 25.2

The new portfolio beta when one stock with a beta of 0.97 is added is,

Portfolio beta = (25.2 + 0.97) / 20

Portfolio beta = 1.3085 rounded off to 1.31

4 0
3 years ago
Production Budget Pasadena Candle Inc. projected sales of 64,000 candles for January. The estimated January 1 inventory is 2,600
icang [17]

Answer:

Production budget:

Projected sales= 64,000

Ending inventory= 7,000

Beginning inventory= (2,600)

Total= 68,400 units

Explanation:

Giving the following information:

Pasadena Candle Inc. projected sales of 64,000 candles for January. The estimated January 1 inventory is 2,600 units, and the desired January 31 inventory is 7,000 units.

Production budget= projected sales + ending inventory - beginning inventory

Production budget:

Projected sales= 64,000

Ending inventory= 7,000

Beginning inventory= (2,600)

Total= 68,400 units

3 0
3 years ago
An entity has two long-term construction contracts, one of which qualifies for revenue recognition while the performance obligat
Morgarella [4.7K]

Answer: construction receivable

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Accounts receivable management involves improving the collection process for efficiency, identifying the reasons for nonpayment and being proactive in reminding clients about their overdue accounts.

6 0
3 years ago
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mel-nik [20]

From the given description, Chip is using an experimental design called (A) matching.

Matching <u>is a type of experimental design where the researcher divide his or her samples into two groups of treatment conditions, which serves to ensure that before the treatment, both groups have the samples with the same characteristics, thus ensuring that the results of the experiment would not be influenced by any confounding variables that the samples have.</u>

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5 0
3 years ago
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