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Elston Company has entered into two lease agreements. In each case the cash equivalent purchase price of the asset acquired is known and you wish to find the interest rate which is applicable to th
Jones was engaged to audit the financial statements of Gamma Corporation for the year ended June 30, 200X. Having completed an examination of the investment securities, which of the following is the
Prepare the journal entries for Meredith Corporation for 2010 and 2011, assuming that Meredith can exercise significant control over Cairo.
Assume income taxes of 20 percent and an increase in sales of $65,000. No other asset buildup will be required to support the increased sales activity. (a) What is the level of accounts receivable t
The income tax rate is 30%. Straight line depreciation is used. What is the payback period?
Smokey Sims is 60 years old and has been asked to accept early retirement from his company. The company has offered three alternative compensation packages to induce Smokey to retire:
ShoGun Sushi buys a piece of equipment for $109,536 that will last for 4 years. The equipment will generate operating cash flows of $34,000 per year and will have no salvage value at the end of its
The income tax rate is 30%. Straight line depreciation is used. What is the net present value using a 7% required rate of return?
For the fiscal year ended March 31, 2004, a company reported earnings per share of $3.25 and cash dividends per share of $0.50. During fiscal 2005, the company had a 3 for 2 stock split. In the annu
A project that required a $420,000 investment generated no net income for the first year of operations, net income of $86,000 in the second year, and net income of $100,000 in year 3. How much is th
Arcano Corporation is considering producing a new automobile product, Shine. Research has determined that the company will be able to sell 60,000 units per year at $12. The product will be produced
Gokey Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $5.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $
The equipment will be depreciated over a five-year period using straight-line depreciation with no residual value. How much is the accounting rate of return of the new business?
Operating cash flows expected in Year 1 are $115,000, with Year 2 as $95,000, and year 3 as $85,000. What is the accounting rate of return for this investment?
The variable cost per meal was $6 and the sales commissions per meal were $1. Total fixed manufacturing costs were $1,400 and total fixed marketing and administrative costs were $1,200. Gross profit
A proposed project will require an initial investment of $1,000,000 and will generate returns of $250,000 per year for five years. If taxes are ignored, what is the internal rate of return?
CB Electronix must buy a piece of equipment to place electronic components on the printed circuit boards it assembles. The proposed equipment has a 10-year life with no scrap value.
A proposed project is expected to generate returns of $50,000 per year for each of the next four years. If the project will cost $145,685 and taxes are ignored, what is the internal rate of return?
An investment of $36,510 promises to return $8,000 each year for the next 7 years. If taxes are ignored, what is the internal rate of return?
What are the earnings per share amounts that Porter should report in its current year consolidated income statement?
An investment of $250,000 will generate cash flows of $110,000 per year in Years 1 and 2 and $40,000 in Year 3. If the company's required rate of return is 8%, what is the net present value of the i
There will not be any cash flows associated with the project after Year 3. If taxes are ignored, what is the internal rate of return for the project?
The Diamond Oaks Company is deciding whether to purchase a machine for $80,000 which will yield the following cost savings:
The machine will be depreciated on a straight-line basis over an 8-year life with no estimated salvage value. The company has a 40% tax rate. How much is annual operating cash flows?
Assume PC Mall sold inventory on account to eCOST.com on December 28, 2008, which was to be delivered January 3, 2009. The inventory cost PC Mall $25,000 and the selling price was $30,000. What amou