Cost of computer $1900 Paper, ink cartridges and other consumables $110 Cost of colour laser printer $450 Installation and testing costs $200 Staff training on new system $500 Annual insurance against theft and breakdowns $90 Cost of rewiring to accommodate new computer $340 Annual maintenance agreement $99 a. Calculate the total of capital expenditure incurred by Erica’s business when acquiring the computer system. b. To what extent would the business’s profits have been reduced by the expenditure listed. c. If Erica had borrowed $3000 to pay for the new computer system, how would the interest payments on the
Cost of computer $1900 Paper, ink cartridges and other consumables $110 Cost of colour laser printer $450 Installation and testing costs $200 Staff training on new system $500 Annual insurance against theft and breakdowns $90 Cost of rewiring to accommodate new computer $340 Annual maintenance agreement $99 a. Calculate the total of capital expenditure incurred by Erica’s business when acquiring the computer system. b. To what extent would the business’s profits have been reduced by the expenditure listed. c. If Erica had borrowed $3000 to pay for the new computer system, how would the interest payments on the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Cost of computer $1900
Paper, ink cartridges and other consumables $110
Cost of colour laser printer $450
Installation and testing costs $200
Staff training on new system $500
Annual insurance against theft and breakdowns $90
Cost of rewiring to accommodate new computer $340
Annual maintenance agreement $99
a. Calculate the total of capital expenditure incurred by Erica’s business when acquiring the computer system.
b. To what extent would the business’s profits have been reduced by the
expenditure listed.
c. If Erica had borrowed $3000 to pay for the new computer system, how would
the interest payments on the loan have affected the business’s revenue
expenditure and profit?
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