Answer:it ignores cash flows following the payback period
Explanation:
The payback method of budgeting does not consider inflows of cash that occur beyond or following the payback period, thus ignoring the profitability of one project as compared to another in the sense that one project may be more valuable than another based on future cash flows.
Also, Many capital investments provide complexity of cash flows as a result of investment returns over a period of many years, which also does not align with Payback method , because of this limitation, many businesses have adjusted by using their discretion to override this rule.
Answer:
Refer To The attached screen shot. It contains the Income Statement Prepared under Absorption Costing.
Explanation:
Absorption Costing assumes that the Manufacturing Costs include Direct Material, Direct Labor, Variable Overhead, and Fixed Overhead. Whereas, Selling and Administrative Expenses are classified as period Costs. These period costs are recognized in the period in which they are incurred. On the other hand, the manufacturing costs are recognized when the goods on which the costs were incurred are sold. That's why we don't recognize $78,000 as a Fixed Overhead because these overhead costs were incurred to produce 6,000 rackets. We have to calculate the fixed overhead cost per unit and multiply it with the units sold.
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I believe the answer is: first step, Planning Initiation
During this step, we determine the objective, scope, and purpose of the joint operation. We also start to structured the things that can be done in order to fulfil the objective and make sure that each steps are rational and can be delivered with sufficient resources.
Answer:
simple rate of return = 16.4 %
so correct option is B. 16.4%
Explanation:
given data
purchasing a machine = $423,000
useful life = 9 years
cash operating costs = $112,000 per year
yielding = $27,000
annual depreciation = $47,000
to find out
simple rate of return on the investment
solution
we get here simple rate of return on the investment that is express as
simple rate of return =
.............................1
put here value we get
simple rate of return = 
solve it we get
simple rate of return = 16.4 %
so correct option is B. 16.4%
Answer:
<u> borrow for one year at 1.75% and then must borrow fixed.</u>
<u>Explanation:</u>
This option appears to be more economically advantageous and would save all jobs. Consider why this is the case from the interest paid in each option:
The Interest rate paid at 1.75%:
- for one year at 1.75% = $700, 000 (1.75%x40,000,000)
- for annually up to five years at 1.75%= $3,500,000 (1.75%x40,000,000x5 years).
The Interest rate paid at 4%:
- borrow fixed for 16 years at 4% = $25,600,000 (4% x 40,000,000 x 16)
- borrow fixed for 12 years (17-5) at 4% = $19,200,000 (4% x 40,000,000 x 1,600,000)
Total:
First option = $26,300,000 plus all jobs saved
Second option = $22,700,000
Therefore, the first option is more economically advantageous.