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2 years ago

An office building has $66,000 of net income and sold for $550,000. What was the rate of return? 12% 8.3% 10% 11.1%

Business

2 answers:

spayn [35]2 years ago

5 0

Answer:

8,3

Explanation:

its less then 10%

horsena [70]2 years ago

4 0

Answer:

Option (a), required return is 12%.

Explanation:

The required return on the investment can be calculated as under:

Required Return = Net Income on Investment / Market Value of Investment

So here, we have net income of $66,000 and Market Value of the investment is $550,000. By putting values in the above equation, we have:

Required Return = $66,000 / $550,000 = 0.12 = 12%

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Champagne, inc., had revenues of $12 million, cash operating expenses of $8 million, and depreciation and amortization of $1.5 m

Hoochie [10]

The free cash flow can be calculated as below:

Revenue 12000000

Less: Expense (8000000)

Less: Depreciation (1500000)

Earnings Before Tax 2500000

Less Tax (750000)

Earnings after tax 1750000

Add Depreciation 1500000

Total Cash Earnings 3250000

Less: Change in Working Capital (500000)

Less : Purchase of Asset (700000)

Free Cash Flow 2050000

Thus Free Cash Flow can be calculated as above.

4 0

2 years ago

Glass Bottle Coffee Company is a calendar year, accrual-basis taxpayer. On October 1, 2019, Glass Bottle sold a 24-month subscri

Goshia [24]

Answer:

Its b

Explanation:

5 0

2 years ago

Suppose that when the price of peanut butter falls from $2 to $1 per jar, the quantity of jelly purchased rises from 14 million

yan [13]

Answer:

-0.20

Explanation:

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.

If cross price elasticity of demand is positive, it means that the goods are substitute goods.

Substitute goods are goods that can be used in place of another good.

If the cross-price elasticity is negative, it means that the goods are complementary goods.

Complementary goods are goods that are consumed together

Cross Price elasticity of demand = midpoint change in quantity demanded / midpoint change in price

Midpoint change in quantity demanded = change in quantity demanded / average of both demands

change in quantity demanded = 16 million - 14 million = 2 million

Average = (16 million + 14 million) / 2 = 15 million

2 / 15 = 0.133

midpoint change in price = change in price / average of both price

change in price = 1 - 2 = - 1

average of price =(2 + 1) / 2 = 1.5

-1/1.5 = -0.67

0.1333 / -0.67

7 0

2 years ago

Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $30 each. His total cost each day is $320

Fudgin [204]

Answer:

In the short run, as long as the contribution margin is positive he should continue in the industry. In the long run, if the company keeps losing money, he should leave the industry.

Explanation:

Giving the following information:

Bob mows lawns for $30 each. His total cost each day is $320, of which $70 is a fixed cost. He mows 10 lawns a day.

First, we need to calculate the unitary variable cost:

Total variable cost= 320 - 70= 250

Unitary varaible cost= 250/10= $25

Contribution margin= 30 - 25= $5

In the short run, as long as the contribution margin is positive he should continue in the industry. In the long run, if the company keeps losing money, he should leave the industry.

6 0

2 years ago

Polk Products is considering an investment project with the following cash flows:

Andrei [34K]

Answer:

b. 1.86 years

Explanation:

The computation of the project's discounted payback is shown below:-

Year Cash Flows Discounted CFs (at 10%) Cumulative

Discounted CFs

0 -$100,000 -$100,000 -$100,000

1 $40,000 $36,363.64 -$63,636.36

2 $90,000 $74,380.17 $10,743.80

3 $30,000 $22,539.44 $33,283.25

4 $60,000 $40,980.81 $74,264.05

Discounted Payback Period = Years before full recovery +

(Uncovered Cost at start of the year ÷ Cash Flow during the year)

Now we will put the values into the formula

= 1 + ($63,636.36 ÷ $74,380.17)

= 1 + 0.86

= 1.86 years

6 0

2 years ago