(Ignore Income Taxes in This Problem

question 79

Essay

(Ignore income taxes in this problem.) Varnes Corporation is contemplating purchasing equipment that would increase sales revenues by $217,000 per year and cash operating expenses by $109,000 per year. The equipment would cost $324,000 and have a 6 year life with no salvage value. The annual depreciation would be $54,000.
Required:
Determine the simple rate of return on the investment to the nearest tenth of a percent. Show your work!

Calculate opportunity costs and understand their role in trade decisions.

Examine the impact of tariffs, blockades, and open markets on international trade dynamics.

Identify the factors leading to imports or exports in specific markets, based on world and domestic prices.

Assess the overall economic welfare impacts of moving from autarky to free international trade.

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Definitions:

Taking Inventory

The process of counting and recording the quantity and condition of items or assets currently held by an organization or individual.

Inside Order Takers

Sales personnel who manage orders and assist customers from within the company, typically in an office setting, rather than in the field.

Functional Salespeople

Sales personnel who focus on the technical or functional benefits of the products or services they are selling rather than forming relational selling strategies.

Transactions

The action or process of conducting business or an instance of buying or selling in a market.