Griffith Corporation is considering an investment in a labor-saving machine. Information on this machine follows: Cost $30,000 Salvage value in five years $0 Estimated life 5 years Annual depreciation $6,000 Annual reduction in existing costs $8,000 Refer to Griffith Corporation. What is the internal rate of return on this project (round to the nearest 1/2%)? Present value tables or a financial
calculator are required.
a. 37.5%
b. 25.0%
c. 10.5%
d. 13.5%
C
IRR = $30,000 / $8,000 = 3.75
Using PV of Annuity Table 5 years. The constant of 3.75 corresponds to a rate of 10.5%
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The new Corina watch has an expected selling price per watch of $42, the projected variable cost per unit is $24, and estimated fixed costs per month are $24,120. The expected breakeven point in sales dollars is
A) $48,240. B) $32,160. C) $40,200. D) $56,280.
Match each term with the correct statement below.
a. common stock b. preferred stock c. cumulative preferred stock d. blue-chip stock e. blue-sky laws f. book value 1. Stock that pays a fixed dividend that is normally a percentage of the par value of the stock 2. Stock that has voting rights 3. A stock of a well-established, large, and stable company 4. State rules against the offering of worthless securities 5. The value of the stock relative to the value of the company 6. Stock that accumulates unpaid dividends until they are all paid
Laramie contracts to provide cattle-herding services to Miles for $1,400 per month. Laramie can¬not transfer this duty
a. under any circumstances. b. without continuing to be potentially liable. c. withoutMiles's consent. d. without paying Miles at least one monthly fee.
Truck & Transfer Inc agrees to pick up two containers for United Home Products Corporation and store their contents, to be delivered later. While Truck & Transfer unloads one container, the other disappears from the company's loading dock.? These facts give rise to? A) a presumption of negligence by Truck & Transfer
B) a presumption of theft by a third party. C) a presumption of theft by Truck & Transfer. D) United Home's liability for the container's loss.