41 Sayer Tool Co. is considering investing in specialized equipment costing $630,000. The equipment has a useful life of five years and a residual value of S61,000. Depreciation is calculated using the straight - line method. The expected net cashinflows from the investment are given below:Year 1$207,0002153,0003170,000496,000554,000$680,000What is the accounting rate of return on the investment? (Round your answer to two decimal places.)O A. 3.21%ОВ. 7.05%OC. 6.43%O D. 7.80%

Straight line depreciation = (Cost of asset - Residual value) / Useful life in years =($630,000 -…

Business

Accounting

41

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable…

A: To increase sales there is need investment in assets and that investment can be managed internally…

Q: 26 The process of measuring, monitoring, and minimizing prevention, appraisal, internal failure, and…

A: Prevention cost is amount of expense incurred to reduce defects in products and services.

Q: Cresskill, Inc., has an investment opportunity in Europe. The project costs €10 million and is…

A: Net Present Value: The difference between the present value of cash inflows and the present value of…

Q: 71,000X6 x- 100 12

A: First take out, 78000 x 6/100= 4680

Q: On her 45th birthday, Lisa Martin takes out a 20-year endowment policy with a £50,000 death benefit…

A: An endowment policy is an essential type of life insurance policy in which an insured get the full…

Q: What is the cash impact from OWC during Year 2? If the change releases cash use a positive sign, if…

A: To calculate the change in Operating Working Capital (OWC) during Year 2, you need to consider…

Q: Comute the inventory at April 30 on each of the following bases. Assume that perpetual inventory…

A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: THE SMITH COMPANY Using the business transactions below, complete T-accounts for the Smith Company.…

A: T Accounts 1. Cash Account Particular Debit Particular Credit To capital A/c…

Q: it say 7,715.47 is incorrect

A: Cash Flow = cf = $27,500Initial Cost = i = $98,000time = t = 4 YearsCost of Capital = r = 14%

Q: Answer no.26 and 27 thank you

A: Cost recovery method: In construction contracts, revenues and expenses are recognized only when the…

Q: Item Classification 1. Sales taxes payable. 2. Pension liability (to be fully paid to retired…

A: Current liabilities are the obligations that are required to be paid of within a year. Whereas, long…

Q: Question 4. Compare the use one of the electronic circuits, as shown in the table below, which…

A: Terminal cash flows are the cash flows which are generated at the end of the project. Terminal cash…

Q: 30 Solution X1 Mix 50 40 0. 01 -M -M X2 X3 Si S2 Ss A1 A2 -M AL S2 S3 A2 Zi CZ 1 -1 01 1 40 16 1 0.…

A: The question is multiple choice question Required Choose the Correct Option.

Q: 31.25 25.0

A: EPS=Earnings per share =0.36+0.42+0.39+0.43=1.60 Price Of shares =P P/E=Price/EPS

Q: Question 8

A: When net credit sales is divided with average accounts receivable it results in receivable turnover…

Q: An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of…

A: ANSWER:- JOURNAL ENTRIES Date Description Post…

Q: side of the account increases the cash account?

A: Cash account is a ledger account which shows movement of cash for transactions.

Q: Queston 14 yhd t 1. 12

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Explanation 1031 like-kind exchange

Q: Determine the tax liability, marginal tax rate, and average tax rate in each of the following cases.…

A: The marginal tax rate represents the highest tax rate paid by the entity, and The average tax rate…

Q: The following incomplete (columns have missing amounts) pension spreadsheet is for the current year…

A: A company's current financial needs to pay for future pension liabilities are calculated actuarially…

Q: 16. Training opportunities fall under which category of returns for work? O A. Total compensation O…

A: All forms of salary and perks are included in an employee's total compensation. In addition to basic…

Q: Muscat securities exchange is a place where: 1. Equity shares are bought and sold 2. Forward…

A: Muscat securities exchange is the financial market which is established in order to develop the…

Q: actuarial and premium rating, and two operations departments - marketing and sales. The distribution…

Q: Accrual basis m

A: Accrual basis is a method of accounting under which income is recognized when earned and expense is…

Q: Question 5.00€ vd rwob asog abnod to oulay sud zofduob soole to oulsy stylquada wat 576 251 12979ti…

A: Systematic Risk: Systematic risk, also known as market risk, is the portion of an asset's risk that…

Q: 1. Prepare a COGM statement for year end 2. Prepare an income statement [ assume interest tax rate…

A: 1) COGM Statement Particulars Amount Amount Beginning direct material $2,850 Add:…

Q: provide a benefit of $30. In 5 years, there will be no salvage value for the equipment. T company's…

Q: ROE 34.25% RNOA 17.28% What inference can I draw based on this ROE and RNOA

A: Return on equity (ROE) is a profitability ratio which shows the portion of net income available for…

Q: B16 Illinois Company prepared the following bank reconciliation at May 31: Balance per bank £5,690 |…

A: The bank reconciliation statement is prepared to equate the balances of cash book and passbook with…

Q: Naragski had a business with beginning balance of his capital account of P250,000. During the year,…

A: Given information Beginning balance of capital = P 250,000 Additional cash invested = P 100,000…

Q: 9) 4%- Describe what the following SEC reports are and their repotting deadline. 20-F and 8-K

A: 20F It is a reporting form submitted to the Securities exchange commission by a foreign private…

Q: 97,004 54,803

A: 97004 minus 54803

Q: What covers the cost of a variable annuities death benefit?

A: The question is related to the Insurance and is related to Variable annuities.

Q: An example of an appraisal cost would be: O Scrap O Process or product design O Product recalls O…

A: Cost of Good Quality is incurred in order to reduce the Cost of Poor Quality, so that overall Cost…

Q: Question 25 of 30 Current Attempt in Progress Activity Cost Pools Ordering and receiving Food…

A: Particulars overhead A cost driver B overhead rate A/B Orders and receiving $93125 12500…

Q: Clay LLC placed in service machinery and equipment (seven-year property) with a basis of $3,469,000…

A: Calculation of Maximum depreciation expense:- OPTION:- $ 667,997 is the correct answer.…

Q: Belowis an income statem ent for NUBD Company: Sales P400,000 (120,000) Contribution margin P280,000…

A: Contribution margin ratio = Contribution margin / sales = 280000/400000 = 70%

Q: conceptual framework

A: Conceptual framework is the visual representation of how the financial information to be presented…

Q: two questions

A: Prepare an income statement.

Q: Prior (Past) service cost is expensed immediately using which of the following? a. U.S. GAAP. b.…

A: Prior or past service cost refers to the changes in the PV of defined benefit obligations due to the…

Q: Royal Bank of Canada has the following information: Closing price: $124.86 EPS (TTM): $11.44 Forward…

A: The forward dividend yield is a financial ratio that expresses the expected annual dividend income…

Q: What is the value of (A/P, i, N) if (P/A, i, N) = 7.7721? a. 0.1287 b. 9.7151 c. 6.9949 d: 1.0000,…

A: (P/A,i,N) is the present worth of series of payment. Formula for present worth of series of payment…

Q: M&M 58 Ksl and M&M63 KSl are equal

A: M&M 58 and M&M 63 -M&M refers to Modigliani and Miller and it indicates the capital…

Q: The Drogon Company just issued a dividend of $2.81 per share on its common stock. The company is…

A: Dividend = D0 = $2.81growth rate = g = 5%Price = P0 = $50Since growth rate is expected to be 5%,…

Q: Retail Sales and Wholesale Sales are the only divisions of Terra Company. The following information…

A: ROI = Total net income/Total operating assets

Q: An information will have predictive value if it can help to. a. Predict the environment b. Predict…

A: Forecasting: Forecasting is a method that uses previous data as inputs to produce well-informed…

Concept explainers

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.

Question

Sayer Tool Co. is considering investing in specialized equipment costing $630,000. The equipment has a useful life of five years and a residual value of S61,000. Depreciation is calculated using the straight - line method. The expected net cash
inflows from the investment are given below:
Year 1
$207,000
2
153,000
3
170,000
4
96,000
5
54,000
$680,000
What is the accounting rate of return on the investment? (Round your answer to two decimal places.)
O A. 3.21%
ОВ. 7.05%
OC. 6.43%
O D. 7.80%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

O O O O 0.021 0.000 0.059 0.081
Q30
Read Section 1366 3. What is the limitation on loss utilization? 4. Look at the special charitable contribution rule.
3:43 اليوم e 12:34 تحریر Problem 7 Illustrate which of the following sentences is true or false: ve 95% the following sente
8. Transform 2 into an improper fraction. 10 a. 28/5 b. 5/14 C. 14/5 d. 14/10
Compute the 2023 tax liability and the marginal and average tax rates for the following taxpayers. Click here to access the 2023 tax rate schedule. If required, round the tax liability to the nearest dollar. When required, round the average rates to four decimal places before converting to a percentage (i.e., .67073 would be rounded to .6707 and entered as 67.07%). a. Chandler, who files as a single taxpayer, has taxable income of $167,400. Tax liability: Marginal rate: Average rate: Marginal rate: % b. Lazare, who files as a head of household, has taxable income of $67,200. Tax liability: Average rate: % % %
Handerson Corporation makes a product with the following standard costs: Standard Quantity or Hours 9.2 kilos Direct materials Direct labor. 0.4 hours Variable overhead 0.4 hours The company reported the following results concerning this product in August Actual output Raw materials used in production Purchases of raw materials. Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost Multiple Choice Standard Price or Rate $ 6.70 per kilo $ 27.00 per hour $ 6.70 per hour 3,900 units 29,730 kilos 32,300 kilos 1,130 hours $ 202,920 $ 23,436 $ 8,240 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for August is:
33 34
Bumgardner Incorporated has provided the following data concerning one of the products in its standard cost system. Inputs Direct materials Standard Quantity or Hours per Unit of Output 8.0 liters Standard Price or Rate $ 5.00 per liter The company has reported the following actual results for the product for April: Actual output Raw materials purchased 7,400 units 65,400 liters $ 5.70 per liter 59,210 liters Actual price of raw materials Raw materials used in production The raw materials price variance for the month is closest to: (Round your intermediate calculations to 2 decimal places.)
The following information is provided for the first month of operations for Legal Services Inc.: A. The business was started by selling $103,000 worth of common stock. B. Six months' rent was paid in advance, $4,100. C. Provided services in the amount of $1,500. The customer will pay at a later date. D. An office worker was hired. The worker will be paid $277 per week. E. Received $520 in payment from the customer in "C". F. Purchased $300 worth of supplies on credit. G. Received the electricity bill. We will pay the $120 in thirty days. H. Paid the worker hired in "D" for one week's work. I. Received $130 from a customer for services we will provide next week. J. Dividends in the amount of $1,800 were distributed. Prepare the necessary journal entries to record these transactions. If no entry is required, select "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. A. B. 111
un.3
58. What role do safety audits play in ensuring compliance with safety regulations?