466. An electric utility purchases 2,300.000 kw-hr per month of electric energy from National PowerCorporation at P2.0o per kw-hr and sells all this to consumers after deducting distribution losses of20%. At what average rate per kw-hr should this energy be sold to break even if the following areother monthly expenses in its operation:Taxes2.5% of gross revenueSalariesP750,000DepreciationP2,250,000InterestP700,000MaintenanceP300,000MiscellaneousP200,000А. Р4.90В. Р5.20C. P5.90D. P6.30

Purchase cost of utility (2300000 KW * P2.00) P46,00,000 Other Monthly Expenses: Salaries…

Answered: 466. An electric utility purchases…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

A small company pays 30% in income taxes. A $2000 machine with a four-year life and zero salvage value will generate revenues of $1200 annually. Using 8%, compare the present worth of the after-tax profits using single line and sum-of-the-years digits depreciation.
8. A machine could be purchased for £800,000; it would be used for 3 years and then sold for £580,000. It would qualify for capital allowances at 18% reducing balance basis with a balancing allowance or charge on disposal. The company pays tax at 20% and has a cost of capital of 10%. What is net present value of the tax cashflows over the life of the machine, to the nearest £100? A £6,300 B £39,400 C £52,000 D £60,200
DT Ltd. provides you the following information: 1. Purchase price of machine Rs. 1,90,000 2. Installation expenses Rs. 10,000 3. Useful life of machine 5 years 4. Salvage value at the end of useful life nil 5. Tax Rate 30% 6. Cost of capital 10% 7. Cash flows before depreciation and tax Rs. 1,00,000 p.a. Required: Calculate the Discounted Payback Period.
New asset costs $12,000. The old asset has a book value of $0 and will be sold for $3,000, increase net working capital by $1,000. Given a 40% tax rate, what is the initial outlay? $10,000 $11,200 $11,800 $12,400
A company with $630,000 in operating assets is considering the purchase of a machine that costs $74,000 and which is expected to reduce operating costs by $20,000 each year. These reductions in cost occur evenly throughout the year. The payback period for this machine in years is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Multiple Choice 3.7 years 8.5 years 0.27 years
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Crane Corp. management is considering purchasing a machine that will cost $117,250 and will be depreciated on a straight-line basis over a five-year period. The sales and expenses (excluding depreciation) for the next five years are shown in the following table. The company’s tax rate is 34 percent. Year 1 Year 2 Year 3 Year 4 Year 5 Sales $127,450 $176,875 $247,455 $254,440 $271,125 Expenses $141,410 $128,488 $137,289 $145,112 $139,556 Crane will accept all projects that provide an accounting rate of return (ARR) of at least 45 percent. (a1) Calculate accounting rate of return. (Round answer to 1 decimal place, e.g. 15.2%.) Accounting rate of return enter the Accounting rate of return in percentages rounded to 1 decimal place %
pm.2
Zachary Corporation Incurs the following annual fixed costs: Item Depreciation Officers' salaries Long-term lease Property taxes Cost $50,000 100,000 90,000 8,000 Required Determine the total fixed cost per unit of production, assuming that Zachary produces 6,500, 7,000, or 7,500 units. Note: Round your answers to 2 decimal places. Units Produced Fixed cost per unit 6,500 7,000 7,500
This question is based on the following in formation: An investment is Machinery costing P 250,000 with a 4-year life and no salvage value is expected to produce the following net income after taxes of 30%: End of year 1 P 17,000 2 22,000 3 25,000 4 26,000 How much is the annual tax shield?How much is the annual tax shield?A. P 17,580B. P 17,850C. P 18,570D. P 18,750What is the ROI (using the cash income)? A. 6.3%B. 9%C. 31.3%D. 34%
Vishnu
Stuart Corporation incurs the following annual fixed costs. Item Depreciation Officers' salaries Long-term lease Property taxes Cost $ 66,000 190,000 Units Produced Fixed cost per unit Required Determine the total fixed cost per unit of production, assuming that Stuart produces 10,000, 10,500, or 11,000 units. (Round your answers to 2 decimal places.) 50,000 11,000 10,000 10,500 11,000

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