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Softa [21]
2 years ago
6

Copa Cabana Corporation is considering the purchase of a new machine costing $30,000. The machine would generate net cash inflow

s of $12,000 per year for 5 years. At the end of 5 years, the machine would have no salvage value. Copa Cabana’s cost of capital is 12 percent. Copa Cabana uses straight-line depreciation. The investment's accounting rate of return on initial investment is: Select one: A. 10.27 percent B. 12.28 percent C. 20.00 percent D. 30.55 percent
Business
1 answer:
olga_2 [115]2 years ago
6 0

Answer:

C. 20.00 percent

Explanation:

The computation of the accounting rate of return is shown below:

The formula to compute the accounting rate of return is shown below:

= Annual net income ÷ initial investment

where,  

Annual net income is

= Net cash flows - depreciation expense

= $12,000 - $6,000

= $6,000

And, the initial investment is $30,000

So, the accounting rate of return on initial investment is

= $6,000 ÷ $30,000

= 20%

The depreciation expense is

= $30,000 ÷ 5 years

= $6,000

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after you analyzed demand, you took steps to make sure your business made sense financially. How will thinking on the margin hel
svetlana [45]

Answer:

Thinking on the margin will ensure that each pair of inserts produced is turning a profit. Once a profit is no longer being made on a pair of inserts, production must be cut back. Understanding these margins will also help me stay competitive in a market that is open to other producers. If additional producers enter the market, I know that I have the ability to lower prices or offer discounts while still maximizing profits.

Explanation:

4 0
2 years ago
Which two of the four cs of credit have to do with earning potential and available cash?
Natali5045456 [20]

The four 'Cs' of credit  are : Character, Capacity or Cashflow, Capital and Conditions.

Out of the 4 'Cs' of credit, the two 'Cs' that deal with the earning potential and available cash are 'Capacity' and 'Capital'.

Capacity: It is the  assessment the of the ability of any business to pay bills and maintain the cash flow. It contains in it  the debt  structure of the firm and the unused credit.

Capital: It is the assessment, if a company has the ability to pay back its creditors by the help of its financial resources or available cash.

7 0
2 years ago
Novak Corp. reported net income of $1.20 million in 2022. Depreciation for the year was $192,000, accounts receivable decreased
Kay [80]

Answer:

$1,476,000

Explanation:

According to the scenario, computation of the given data are as follows:-  

Statement of The Cash Flow 31 December,2022

Particular                               Amount        Total Amount

Net Income                                                  $1,200,000

Depreciation                                $192,000  

Accounts receivable Decrease   $420,000  

Accounts payable Decrease       ($336,000)  

                                                                 $276,000

Net cash provided by operating activities        $1,476,000

6 0
2 years ago
Tickets Now contracts with the producer of Riverdance to sell tickets online. Tickets Now charges each customer a fee of $4 per
Lemur [1.5K]

Answer:

The correct option: $14 because both the fee from the customer and the producer are earned

Explanation:

Based on the information given we were told that Tickets Now charges each of their customer a fee amount of $4 per ticket in which they receives the amount of $10 per ticket from the producer which means that the amount of revenue Tickets should Now recognize for each Riverdance ticket they sold will be $14 ($10 per ticket +$4 per ticket) because both the fee from the customer and the producer are earned.

7 0
2 years ago
The following information has been obtained from the Massena Corporation: 100,000 shares of common stock were outstanding on Jan
aivan3 [116]

Answer:

247,500

Explanation:

The calculation showing the weighted average number of shares to be used in the calculation of the of the basic earning per share for 2018 is shown below:

= [(100,000 * \frac{12}{12}) + (30,000 * \frac{10}{12})] * 2 Stock splits - 10,000 * \frac{3}{12}

= 250,000 - 2,500\\= 247,500

3 0
2 years ago
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