Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. required information skip to question [the follow

Required information Skip to question [The following information applies to the questions displayed...

80.2K

Verified Solution

Question

Accounting

Required information
Skip to question
[The following information applies to the questions displayed below.]
Nicks Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $320,000, have a fifteen-year useful life, and have a total salvage value of $32,000. The company estimates that annual revenues and expenses associated with the games would be as follows:
Revenues $ 230,000
Less operating expenses:
Commissions to amusement houses $ 80,000
Insurance 20,000
Depreciation 19,200
Maintenance 50,000169,200
Net operating income $ 60,800
2a. Compute the simple rate of return promised by the games.
2b. If the company requires a simple rate of return of at least 14%, will the games be purchased?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A-Describe the phases that are involved in the uterine (menstrual) cycle. Ensure you include associated hormones...

Medical Sciences
Q

three charged particles are placed at the corners of an equilateral triangle of side 1.20m. the...

Physics
Q

Personal Learning Journal Pre-unit self-assessment Name: Unit topic: ACCESSIBILITY I would rate my current knowledge or skill level with...

Psychology
Q

Water enters vertically and steadily into a sprinkler shown below and is discharged at a...

Physics
Q

3 The net of a rectangular prism and its dimensions are shown in the diagram...

Algebra
Q

George Company uses an absorption costing system based on standard costs. Total variable manufacturing costs,...

Accounting
Q

The high-low method a. calculates variable costs per unit by dividing the difference in the...

Accounting
Q

Continued from Case study and Question 1 You are the Chief Financial Officer...

Accounting
Q

when sinbad retires he expects his rrsp to pay him $2000 at the end of...

Accounting
Q

We are comparing two companies that are listed on the ASX and which have disclosed...

Accounting
Q

5. Harmon Company uses the weighted-average method in its process costing system. The Curing Department...

Accounting
Q

3. (23 marks) The December 31, 2020, trial balance of John's Delivery Service, before adjusting...

Accounting