A company is planning to purchase a machine that will cost $24,600 with a six-year life...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A company is planning to purchase a machine that will cost $24,600 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine? $ 91,000 Sales Costs: Manufacturing $52,100 Depreciation on machine Selling and administrative expenses 4,100 31,000 (87,200) $ 3,800 (1,330) $ 2,470 Income before taxes Income tax (35%) Net income Multiple Choice 3333%. 50.00% 4.10%. 20.08%. 10.04% A company is planning to purchase a machine that will cost $24,600 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine? $ 91,000 Sales Costs: Manufacturing $52,100 Depreciation on machine Selling and administrative expenses 4,100 31,000 (87,200) $ 3,800 (1,330) $ 2,470 Income before taxes Income tax (35%) Net income Multiple Choice 3333%. 50.00% 4.10%. 20.08%. 10.04%
Expert Answer:
Related Book For
Managerial economics applications strategy and tactics
ISBN: 978-1439079232
12th Edition
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris
Posted Date:
Students also viewed these finance questions
-
M & M Company is planning to purchase a cotton bailing machine for OMR 375,000. It will cost OMR 3,750 to transport the bailer to the company location. The useful life of the new machine is five...
-
2. A company is planning to purchase a machine for $50,000 which is expected to last 7 years, cost $3000 a year to run and have a zero salvage value at that time. Assume capital cost to be 12% per...
-
A company is planning to invest $100,000 (before tax) in a personnel training program. The $100,000 outlay will be charged off as an expense by the firm this year (year 0). The returns from the...
-
Now apply one of those decision making models (Philosophical) to this scenario: Scenario: You are a CPA in the accounting department at a HealthCare System with three other accountants. You are good...
-
The hollow box beam shown in the figure is subjected to a bending moment M of such magnitude that the flanges yield but the webs remain linearly elastic. (a) Calculate the magnitude of the moment M...
-
1. Using the information provided, describe, through graphical summaries and numerical summaries such as the mean and standard deviation, each probability distribution. 2. Does it appear that, on...
-
In Example 17.11, assume that the promised amounts to \(A\) and \(B\) are \(\$ 110\) and \(\$ 90\), respectively. Develop the new table of results. What are the prices of \(A\) and \(\mathrm{B}\) ?...
-
Book vs. Tax (MACRS Depreciation) Elwood Inc. purchased computer equipment on March 1, 2010, for $36,000. The computer equipment has a useful life of 10 years and a salvage value of $3,000. For tax...
-
CON 448: SUSTAINABLE CONSTRUCTION PROJECT ASSIGNMENT - 1 Product Research DESCRIPTION & INSTRUCTIONS: As construction field engineers, you may be asked to source materials or equipment that is...
-
Aaron Rivers, CPA, is auditing the financial statements of Charger Company, a client for the past five years. During past audits of Charger, Rivers identified some immaterial misstatements (most of...
-
Describe the nature of Global Bike Inc's product/service offering in terms of the following dimensions: Information vs. physical - to what degree is the nature of Global Bike Inc's offering a pure...
-
The exchange rate at the end of the year is SF0.9800/$. The price level of a typical consumption basket in Switzerland is SF123 and the price level of a typical consumption basket in the United...
-
You own a grocery store chain that, among other things, sells bread to customers. You outsource the production of your bread to a bread manufacturing business (supplier) and want to assess the value...
-
What methodologies does the researcher employ to discern the multifaceted ramifications of climate change on indigenous communities, and how do these findings inform broader environmental policy...
-
The exchange rate at the beginning of the year was SF1.0000/$. The price level of a typical consumption basket in Switzerland was SF120/SFCB and the price level of a typical consumption basket in the...
-
The Canada Improvement Financial Analysis The Canada Improvement, one of the largest home improvement retailers globally, exhibited strong financial performance in fiscal year 2019, as evidenced by...
-
Pharoah Restaurant Supply Company has 9500 shares of 5%, $100 par value, cumulative preferred stock and 19000 shares of $1 par value common stock outstanding at December 31, 2023, December 31, 2024...
-
Sandcastles, Inc.s management has recently been looking at a proposal to purchase a new brick molding machine. With the new machine, the company would not have to buy bricks. The estimated useful...
-
Explain how the optimal incentives contract would differ if the less risk-averse bank officer (Dashing in Figure) had generated the smaller expected profit (i.e., the lower hill-shapedcurve). Sorting...
-
Cool-Aire Corporation manufactures a line of room air conditioners. Its breakeven sales level is 33,000 units. Sales are approximately normally distributed. Expected sales next year are 40,000 units...
-
Compare the optimal solutions obtained in Exercises 2 and 3. Specifically: a. How much higher (lower) is the optimal selling price when the two firms form a cartel to maximize industry profits,...
-
You shoot a beam of electrons through a double slit to make an interference pattern. After noting the properties of the pattern, you then double the speed of the electrons. What effect would this...
-
How many photons does a \(5.0 \mathrm{~mW}\) helium-neon laser \((\lambda=633 \mathrm{~nm})\) emit in 1 second? A. \(1.2 \times 10^{19}\) B. \(4.0 \times 10^{18}\) C. \(8.0 \times 10^{16}\) D. \(1.6...
-
Light consisting of \(2.7 \mathrm{eV}\) photons is incident on a piece of potassium, which has a work function of \(2.3 \mathrm{eV}\). What is the maximum kinetic energy of the ejected electrons? A....
Study smarter with the SolutionInn App