What is the rate of return on average investment

Assignment Help Accounting Basics
Reference no: EM132560031

Question 1 - Y Corporation produced 10,000 defective radios. The radios cost $8 each. A salvage company will pay $3 each for the defective radios. Y's production manager reports that the defects can be corrected for $5 per unit, enabling them to be sold at their regular price of $12.50 each. Y should:

A. Sell the units to the salvage company for $3 per unit.

B. Correct the defects and sell the radios at the regular price.

C. Sell the radios at $3 because repairing them will cause their total cost to exceed their selling price.

D. Sell 5,000 radios to the salvage company and repair the remainder.

E. Do something else.

Question 2 - X Corporation is considering buying a $25,000 machine. Its estimated useful life is 5 years, with no salvage value. X anticipates annual net income after taxes of $1,500 from the new machine. What is the rate of return on average investment, assuming that X uses straight-line depreciation and that the net income is earned uniformly throughout each year?

A. 6.0%

B. 8.0%

C. 12.0%

D. 26.0%

E. 52.0%

Reference no: EM132560031

Questions Cloud

How flow of costs in a job-order costing system follows flow : Briefly explain how the flow of costs in a job-order costing system follows the flow of the physical production
What is the correct amount of a company bad debt expense : Using the allowance method, what is the correct amount of a company's bad debt expense for the year, given the above information
Prove that price of the bond is a convex function of yield : Assume that its yield is equal to 10%. Assume F = 100 for face value. Prove that the price of the bond is a convex function of the yield.
On Faulkner-A Rose for Emily : What is the setting of William Faulkner's short story, "A Rose for Emily"? How does this setting reflect the personality of the protagonist?
What is the rate of return on average investment : What is the rate of return on average investment, assuming that X uses straight-line depreciation and that net income is earned uniformly throughout each year
Number of tickets sold times the price of the ticket : Box office gross is calculated by multiplying the number of tickets sold times the price of the ticket.
Develop a detailed asset management strategy : Develop a detailed asset management strategy to ensure streamlined acquisition and management - implement your Asset Identification and Monitoring Strategy
Describe one or two drug-drug or drug-food interactions : E.H. is a 45-year-old African American man who recently moved to the community from another state. He requests renewal of a prescription for a calcium.
Difference between north korea and south korea : The two Koreas, North and South Korea, are shown in a satellite photo taken at night, Bright areas show where there are artificial lights, and dark areas

Reviews

Write a Review

Accounting Basics Questions & Answers

  Problem regarding retainer fees as sales

Bunch o' Balloons markets balloon arrangements to companies that want to thank clients and employees. Bunch o' Balloons has a unique style that has put it in high demand. Consequently, Bunch o' Balloons has asked clients to establish an account. C..

  Would you change the accounting for the two departments

Melanie would like you, the staff accountant, to charge the advertising expense for the Hobby department to Toy's. With only these facts, would you change the accounting for the two departments?

  Auditors report as to consistency

Which of the following requires recognition in the auditor's report as to consistency?

  What are examples of irregular items

What are examples of irregular items? How does a change in accounting principles affect the financial statements? Who in the organization is responsible for the application of a change in an accounting principle? Why?

  What is the company''s degree of operating leverage

Parker Company has provided the following data for the most recent year: net operating income, $29,000; fixed expense, $125,000; sales, $220,000; and CM ratio, 70%.What is the company's degree of operating leverage? (Round your answer to 2 dec..

  Preparing a retained earnings statement

It declared and paid a dividend of $21,000 as a cash dividend. In 2010, the company recorded and adjustment of $10,000 due to the understatement (from a math error) of 2009 depreciation. Prepare a retained earnings statement for the year ending De..

  What can people learn about stewardship

What can people learn about stewardship from Statement of Cash Flows? What insights does it provide that people can't learn from the other 3 Financial Statement

  On january 31 2011 b corp issued 450000 face value 10 bonds

on january 31 2011 b corp. issued 450000 face value 10 bonds for 450000 cash. the bonds are dated december 31 2010 and

  What is the direct materials efficiency variance

The following data pertains to the direct materials cost for the month of October. What is the direct materials efficiency (quantity) variance?

  Sanchez products co has two departments mixing and cooking

sanchez products co. has two departments mixing and cooking. at the beginning of the month cooking has 4000 units in

  Perform the concurring partner review

An additional partner review of the audit and its findings is typically performed by an experienced member of the firm.

  A company uses fifo method in its process costing system

a company uses fifo method in its process costing system. the beginning wip inventory in a particular department

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd