Answer: Aggregate Demand Decreases
Explanation:
When the Central Bank sells bonds, it is engaging in Open Market Operations to reduce the amount of money in the Economy by taking money out of people's hands ( the money they will use to buy the bonds).
When money supply in the economy decreases, it will have the opposite effect on Interest rates as they will increase because money is no longer readily available.
When this happens both businesses and Individuals will reduce the amount of money they borrow for investment and consumption respectively which are both components of Aggregate Demand.
Aggregate Demand therefore decreases and the AD curve shifts to the LEFT to depict this.
Suppose Fuzzy Button Clothing Company is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $550,000. The project is expected to generate the following net cash flows: Year Cash Flow
Year 1 $375,000
Year 2 $475,000
Year 3 $425,000
Year 4 $500,000
Required:
Fuzzy Button Clothing Company's weighted average cost of capital is 7%, and project Alpha has the same risk as the firm's average project. Based on the cash flows, what is project Alpha's net present value (NPV)?
Answer:
Project Net Present Value = $943,724.89
Explanation:
The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
PV of cash inflow= $375,000 ×1.07^(-1) + (475,000× 1.07^(-2)+ 425,000× 1.07^(-3) + 500,000 × 1.07^(-4) = 1,493,724.889
Initial cost = 550,000
NPV = 1,493,724.88 - 550,000 = 943,724.89
Project Net Present Value = $943,724.89
The Driftbuster Sno-Mobile repair company has a seasonal demand for its service, and there is a general shortage of skilled Sno-Mobile mechanics in it's region. Which one of the following aggregate planning choices is most suitable for this situation
A. Allow some backorder for short-term demand surges
B. Combination of allowing backorder for short-term demand surges and building anticipation inventories.
C. Combination of hiring/firing workers to match demand and building anticipation inventories.
D. Combination of allowing backorder for short-term demand surges and offering reduced prices during the slack season.
Answer: Combination of allowing backorder for short-term demand surges and building anticipation inventories.
Explanation:
From the question, we are informed that the Driftbuster Sno-Mobile repair company has a seasonal demand for its service, and there is a general shortage of skilled Sno-Mobile mechanics in its region.
Based on the situation above, the planning choice is to allow backorder for short-term demand surges and build anticipation inventories. Since demand is seasonal, it's vital for the company to build anticipation inventories. It's also important for the company to create orders for short term surges.
Fig Newton Industries is considering a project and has developed the following estimates: unit sales = 7,525, price per unit = $149, variable cost per unit = $91, fixed costs = $216,400. The depreciation is $94,700 a year and the tax rate is 43 percent. What effect would an increase of $1 in the selling price have on the operating cash flow
Answer:
Effect on income= 4,289.25 increase
Explanation:
Giving the following information:
Units sold= 7,525
Tax rate is 43 percent.
Increase in the selling price= $1
If all costs remain constant, we need to calculate the increase in contribution margin and the tax effect.
Effect on income:
Contribution marin= 7,525*1= 7,525
Tax= 7,525*0.43= (3,235.75)
Effect on income= 4,289.25 increase
If the product line is discontinued, $4,000 of the fixed costs would be avoided. Also, the freed-up capacity would generate $6,000 of additional contribution margin from the expansion of other product lines. If Courtney discontinues the product line, the effect on overall income will be
Answer:
CourtneyDiscontinued Product Line:
The overall income will increase by $10,000 ($4,000 + 6,000).
Explanation:
In a decision to discontinue a product line, the relevant costs to consider are the avoidable costs. These are costs that will no longer be incurred when a line is discontinued. They are relevant to the decision, unlike costs that will not change as a result of the discontinued product line.
Incremental revenue that will be resulting from a discontinued product line is also relevant. For example, the additional contribution margin of $6,000 is relevant to the decision of whether to continue or discontinue the product line, all other things remaining equal.
A company wants to restrict access to sensitive data. Only those who have a "need to know" will have access to this data. Strong access controls need to be implemented. Which of these examples, that don't include user identification, are used for 2-factor authentication? Check all that apply.
Answer:
Password and U2F token
Explanation:
The password and the U2F token do not include user identification but are applied or used for two factors authentication
Here password could be for social websites like login to social websites. When login it asks for authentication for higher security so that the hacking could be minimized
The U2F refers to the universal two-factor authentication. It can be used through the USB, NFC, Bluetooth device
In the multiple-step income statement, cost of merchandise sold is subtracted from a.selling expenses. b.sales. c.gross profit. d.operating expenses.
Answer:
b.sales
Explanation:
As we know that
Income statement refers to the statement in which the revenues and the expenses incurred should be recorded
While on the other hand the multiple-step income statement refer to the statement in which there are various level like gross profit, total operating expenses etc
Plus we also know that
Gross profit = Sales - cost of goods sold
Therefore the cost of merchandise should be deducted from sales so that we can find out the gross profit
What are the macroeconomic conditions affecting the IT industry?
Select "yes" for those statements that are accurate and choose "no" for those that are not.
From a social-cultural perspective, Ricoh is a strong brand name because of the strong privacy policies it has in place.Yes/No
Answer:
The answer is Yes.
Explanation:
Yes, the given statement is accurate because nowadays people are more concerned and insecure about privacy. Since it is given that Ricoh is a strong brand that means people are already believing in it and its privacy policy attracts more consumers. Therefore, it can be said that is will affect the IT industry at the macroeconomic level.
On May 10, Paige Corporation issues 2,500 shares of $5 par value common stock for cash at $13 per share.
Journalize the issuance of the stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
May 10
Answer:
Please refer to the below for the journal entries.
Explanation:
Journal entry is as seen below;
Cash account Dr $32,500
Common stock Cr $12,500
Capital in excess of common stock Cr $20,000
(To record issuance of the stock)
Workings per above journal entries.
Cash
=2,500 shares × $13 per share
= $32,500
Common stock
= 2,500 shares × $5 per share
= $12,500
Paid in capital in excess of common stock
= 2,500 shares × $8 per share ($13 - $5)
= $20,000
Bethesda Water has an issue of preferred stock outstanding with a coupon rate of 4.80 percent that sells for $92.78 per share. If the par value is $100, what is the cost of the company's preferred stock?
Answer:
Cost of preferred stock=5.17%
Explanation:
A preferred stock entitles its investor to a fixed amount of dividend for the foreseeable future. The dividend payable by a preferred stock is similar to a perpetuity. Hence, the price of the stock would be the same as the present value of the dividend payable for the foreseeable future.
A preferred stock entitles its owner to a fixed amount of dividend. It is calculated as follows:
Cost of preferred stock = (Preference dividend/stock price ) × 100
Preference dividend = Coupon rate × Nominal value
DATA
Coupon = 4.80%
Nominal Value = 100
Stock price = $92.78
Preference dividend = 4.80% × 100=4.8
Cost of preferred stock = 4.8/92.78× 100 = 5.17%
Cost of preferred stock=5.17%
Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%. a. What is the margin in Dée’s account when she first purchases the stock?
Answer:
Margin in Dee's account when she first purchase the stock is $8,000
Explanation:
The total value of stock purchased = $40 × 300 shares = $12,000
Since the amount borrowed from the broker is $4,000. Therefore, Dee's margin will be calculated as;
= Total purchase price - Net borrowing
= $12,000 - $4,000
= $8,000
Following are the transactions of a new company called Pose-for-Pics.
Aug. 1
Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the company in exchange for common stock.
2 The company paid $2,100 cash for an insurance policy covering the next 24 months.
5 The company purchased office supplies for $880 cash.
20 The company received $3,331 cash in photography fees earned.
31 The company paid $675 cash for August utilities.
Prepare an August 31 trial balance for Pose-for-Pics.
Answer:
Pose-for-Pics
Trial balance
For the month ended August 31, 202x
debit credit
Cash $6,176
Prepaid insurance $2,012.50
Office supplies $880
Equipment $33,500
Madison Harris, capital $40,000
Service revenue $3,331
Insurance expense $87.50
Utilities expense $675
Total $43,331 $43,331
Explanation:
Dr Cash 6,500
Dr Equipment 33,500
Cr Madison Harris, capital 40,000
Dr Prepaid insurance 2,100
Cr Cash 2,100
Dr Insurance expense 87.50
Cr Prepaid insurance 87.50
Dr Office supplies 880
Cr Cash 880
Dr Cash 3,331
Cr Service revenue 3,331
Dr Utilities expense 675
Cr Cash 675
We would expect the interest rate on Bond A to be lower than the interest rate on Bond B if the two bonds have identical characteristics except that:___________
a. Bond A was issued by a financially weak corporation and Bond B was issued by a financially strong corporation.
b. Bond A was issued by the Exxon Mobil Corporation and Bond B was issued by the state of New York.
c. Bond A has a term of 1 year and Bond B has a term of 5 years.
d. All of the above are correct.
Answer:
The option (d) is correct
Explanation:
Solution
From the given question, option (d) is correct because Bond A has a lower term of maturity, issued by a financially weak corporation and compared to government security it is offering lower returns implies it has a lower interest rate than bond B having identical characteristics expect the above.
Patrick Inc. makes industrial solvents sold in 5-gallon drum containers. Planned production in units for the first 3 months of the coming year is: January43,800 February41,000 March50,250 Each drum requires 5.5 gallons of chemicals and one plastic drum container. Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one drum is $1.60. Required: 1. Calculate the ending inventory of chemicals in gallons for December of the prior year, and for January and February. What is the beginning inventory of chemicals for January
Answer:
Ending inventory (December) = $72,270
Ending inventory (January) = $67,650
Ending inventory (February) = $82,912.50
Beginning Inventory (January ) = $72,270
Explanation:
The ending inventory of chemicals in gallons :
Note : Based on Company policy, this was determined as 15% of next month's production needs.
Ending inventory (December) = 43,800 × 15% × 5.5 gallons × $2.00
= $72,270
Ending inventory (January) = 41,000 × 15% × 5.5 gallons × $2.00
= $67,650
Ending inventory (February) = 50,250 × 15% × 5.5 gallons × $2.00
= $82,912.50
The beginning inventory of chemicals for January is equal to the Ending inventory for December that is $72,270
Equipment was purchased for $78000 on January 1, 2018. Freight charges amounted to $4400 and there was a cost of $10400 for building a foundation and installing the equipment. It is estimated that the equipment will have a $15100 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2019, if the straight-line method of depreciation is used
Answer:
The amount of accumulated depreciation at December 31, 2019 is $31,080
Explanation:
Straight line method, charges a fixed amount of depreciation over the use of an asset in the business.
Depreciation Expense Using Straight line method is calculated as :
Depreciation Expense = (Cost - Salvage Value) / Estimated useful life
First step is to determine the cost of the equipment.
Calculation of Cost of Equipment :
Purchase price $78,000
Freight charges $4,400
Installation costs $10,400
Total Costs $92,800
Then calculate the depreciation expense :
Depreciation Expense = ($92,800 - $15,100) / 5 years
= $15,540
Accumulated depreciation by December 31, 2019 is calculated as :
Accumulated depreciation = $15,540 × 2
= $31,080
Conclusion :
The amount of accumulated depreciation at December 31, 2019 is $31,080.
QS 18-11 Margin of safety LO P2 Zhao Co. has fixed costs of $455,600. Its single product sells for $191 per unit, and variable costs are $124 per unit. If the company expects sales of 10,000 units, compute its margin of safety in dollars and as a percent of expected sales.
Answer:
The margin of safety in dollars is $611,200 and the margin of safety percent is 32%
Explanation:
In order to calculate the margin of safety in dollars and as a percent of expected sales If the company expects sales of 10,000 units we would have to calculate the following:
margin of safety in dollars=Margin of Safety units*sold price
sold price=$191 per unit
Margin of Safety units = Sales - Breakeven units
sales=10,000 units
Breakeven units = Fixed cost/Contribution margin per unit
B reakeven units= $455,600/($191-$124) =
B reakeven units= 6800
Margin of Safety units =10,000 - 6.800
Margin of Safety units =3,200
Therefore, Margin of Safety in dollars = 3,200*$191
Margin of Safety in dollars =$611,200
Margin of Safety percent=Margin of Safety units/sales
Margin of Safety percent= 3,200/10,000
Margin of Safety percent=32%
The margin of safety in dollars is $611,200 and the margin of safety percent is 32%
Percentage of market share and rate of on-time deliveries are indicators of the ________ perspective. A. customer B. learning and growth C. internal business D. quality management
Answer:
The answer is option (A) customer
Explanation:
Solution
Percentage of market share and rate of on-time deliveries are indicators of the customer perspective or view
Customer: A customer is a person or business that buys another company's goods or services. most public-facing businesses participate with other companies to attract customers, either by forcefully advertising their products or by reducing prices to broaden their customer bases.
Which of the following markets has a barrier to entry? A. There are already many fast food restaurants in the City of Buffalo. B. Stan's Garbage Company runs the only trash collection service in town. C. Crystal develops a new product and patents it. D. Gold can only be mined in certain places in the world.
Answer: C. Crystal develops a new product and patents it.
Explanation:
A Patent is one of the ways that a monopoly can be formed in an industry. A Patent is a government issued guarantee that other entities should not tamper with the product that was patented unless they get permission from the patentee to do so.
Patents in the United States usually last for 20 years and in that time only the people who patented it may use it. This is a Government enforced barrier to entry as other companies cannot make the product in question thereby creating a monopoly for the people that did patent it.
In order to improve economic growth, a country should adopt which of the following exchange rate systems? A. Adopt a soft peg to the country that is growing the most. B. Fix their currency to the country that is growing the most. C. Allow their currency to float on the market. D. Adopt the country's currency that is growing the most; e.g., dollarize, or adopt the Chinese renminbi. E. There is no superior system; each country has to decide what is best.
Answer:
E. There is no superior system; each country has to decide what is best.
Explanation:
The exchange rate system refers to the method that is used to determine the exchange rate among the countries. The exchange rate helps in determining the rate of domestic currency in accordance with the other country's currencies. The exchange rate determines the rate that is used in the exchange of one currency with another. The foreign exchange market helps in determining the exchange rates of the countries.
Increasing real wages, reducing interest rates, and an increase in global growth are some of the factors that help in the improvement in economic growth. At the same time, there is no superior or inferior method of exchange rate systems that a country may adopt to improve economic growth.
Mark and Joseph are junior photographers with Iclick Studios. Both of them are professional and sincere. However, Mark is recognized as the top performer among Iclick's entry-level employees. This was possible because he acquired the license to use the latest photo editing application, while Joseph did not. According to the performance formula, which of the following factors helped Mark achieve this feat?
1. Ability
2. Skills
3. Motivation
4. Resources
Answer:
4. Resources.
Explanation:
In this scenario, Mark and Joseph are junior photographers with Iclick Studios. Both of them are professional and sincere. However, Mark is recognized as the top performer among Iclick's entry-level employees. This was possible because he acquired the license to use the latest photo editing application, while Joseph did not. According to the performance formula, the resources acquired helped Mark achieve this feat.
Resources in economics can be defined as a set of tangible assets or materials that are used for the production of goods or used for the rendering of services that meets the insatiable needs of people at a specific period of time.
In Economics, resources can either be any of the four (4) factors of production and these are;
1. Land.
2. Entrepreneurship.
3. Labor.
4. Capital.
In this context, Mark is the top performer among Iclick's entry-level employees because he acquired the license to use the latest photo editing application (a scarce but desired resources), while his colleague, Joseph did not.
Parton owes $3 million that is due on February 28. The company borrows $2,400,000 on February 25 (5-year note) and uses the proceeds to pay down the $3 million note and uses other cash to pay the balance. How much of the $3 million note is classified as long-term in the December 31 financial statements
Answer:
$2,400,000
Explanation:
Based on the information given, How much of the $3 million note that is classified as long-term in the December 31 financial statements will be $2,400,000 because we were told that
Parton owes the amount of $3 million which is due on February 28 while the company borrows the amount of $2,400,000 on February 25 (5-year note) which means that the amount that the company borrowed on February 25 on a 5 year note will be classified as long-term in the December 31 financial statements.
Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category
Answer:
income elasticity is less than one - water
income elasticity is greater than one - designer handbag
Explanation:
Normal goods are goods whose demand increases when income increases and falls when income falls.
When income elasticity is less than one it is known as inelastic demand and when income elasticity is greater than one, it is known as elastic demand,
necessity goods are examples of goods with inelastic demand. for example, water. one cant do without water as it is needed for survival. if income increases, there would be little or no change in quantity demanded
luxury goods typically have an elastic demand. as income increases, more of the good would be demanded. an example of a luxury good is a designer handbag
Nonuniform Inputs, Equivalent Units Terry Linens Inc. manufactures bed and bath linens. The bath linens department sews terry cloth into towels of various sizes. Terry uses the weighted average method. All materials are added at the beginning of the process. The following data are for the bath linens department for
August:
Production:
Units in process, August 1, 25% complete* 10,000
Units completed and transferred out 60,000
Units in process, August 31, 60% complete* 20,000
* With respect to conversion costs.
Required: Calculate equivalent units of production for the bath linens department for August.
Materials= equivalent units of production
Conversion= equivalent units of production
please don't skip steps,show all work
Answer:
For Material 80,000
For Conversion 72,000
Explanation:
The computation of equivalent units of production for the bath linens department for August is shown below:-
Materials Conversion
Units completed and
transferred out 60,000 60,000
Units in process,
August 31 20,000 12,000
(20,000 × 60%)
Equivalent units of
production 80,000 72,000
Therefore to reach out the equivalent units of production we simply added the units completed and transferred out with Units in process Aug 31 of material and conversion.
Explain how the political systems of countries differ. Explain how the economic systems of countries differ. Explain how the legal systems of countries differ. Explain the implications for management practice of national differences in political economy. g
Explanation:
Every country operate in a different yet similar system of both political and social affairs. In terms of political differences, some countries have parliamentary governments while some countries like the US have presidential governments.
Regardless of how each country operate politically, most of the operational system of these countries are embedded in democracy and the general welfare of its citizens. The differences occur because of these operational systems of each country. They could differ in policies, reforms or laws which are based on the interests of its people and the nation.
In economic terms, the differences occur when governments prioritize what economic policies or model they choose to implement. Economic systems of a country change according to the need of the times. For instance, China initially, after its independence, chose to remain a closed economy until it reformed its policies in 1978 to finally open up the country.
Legal systems of countries differ from one another as every country use a civil law system based on its cultural, social, political and historical circumstances. For instance, in US each state has the power to establish its own legal procedures while in some country, every state must follow a uniform civil code.
As we know the political economy refers to both the political and economic systems of a country, management practice of national differences is important to taken into account before securing economic relations with another country. Management practice of national differences helps in finding favorable economic and political systems around the world for a country to make both economic and political partnership with.
The objective of financial reporting include all of the following except to provide information that Group of answer choices is useful to the IRS in assessing taxes to business entities. is useful to those making investment decisions. is useful to those lending out money to business entities. is useful to creditors in making decisions about providing resources to business entities.
Answer:
is useful to the IRS in assessing taxes to business entities.
Explanation:
The financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining standard financial accounting and reporting for general guidance of individuals such as investors, issuers and auditors.
Financial reporting can be defined as the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors.
The objective of financial reporting include all of the following to provide information that:
1. Is useful to those making investment decisions. This information would help creditors to determine whether they should lend to a client or not; or assist investors in deciding whether they should invest in a business or not.
2. Is useful to those lending out money to business entities. When investors and creditors are well furnished with financial information about an organization, they would be able to assess the amounts of cash, timing, and uncertainty of cash flows from dividends or interest.
3. Is useful to creditors in making decisions about providing resources to business entities.
In conclusion, the financial report is not useful to the Internal Revenue Service (IRS) in assessing taxes to business entities.
ABC Bank is offering 3.6 percent compounded quarterly on its savings accounts. You deposit some amount of cash in the saving account today. After 5 years, you have $89,719 in your account. How much did you deposit today
Answer:
PV= $74,999.97
Explanation:
Giving the following information:
Interest rate= 0.036/4= 0.009
Number of quarters= 5*4= 20
Future value= $89,719
We need to determine the initial inventment. We will use the following formula:
PV= FV/(1+i)^n
PV= 89,719/ (1.009^20)
PV= $74,999.97
You are scheduled to receive $20,000 in two years. When you receive it, you will invest it for six more years at 6.8 percent per year. How much will you have in eight years?
Answer:
The amount you will have in eight years is $29,679.56
Explanation:
In order to calculate the amount you will have in eight years we would have to use the following formula:
amount you will have in eight years=PV*(1+r)∧n
According to the given data:
PV=$20,000
r=6.8%
n=6
Therefore, amount you will have in eight years=$20,000*(1+6.8%)∧6
amount you will have in eight years=$29,679.56
You are the new manager in an Indian office. You ask one of your supervisors to move a desk and place it in another corner of the office. The next day you notice it has not yet been done. Why
Answer:
Explanation:
Since not much information has been provided, the two most likely reasons as to why this has not been done would be the following,
One would be that the supervisor did not understand your request due to language barriers that you are not accustomed to since this is your first time working in an Indian office.
The Second most likely reason is that it is not the supervisors job to move your office furniture around. The supervisor is a higher position than manager and his primary responsibility is to look over your performance and make sure that you are doing what you have been hired to do.
Use the following items to determine the total assets, total liabilities, net worth, total cash inflows, and total cash outflows. Rent for the month, $650 Monthly take-home salary, $2,185Spending for food, $345 Cash in checking account, $450Savings account balance, $1,890 Balance of educational loan, $2,160Current value of automobile, $8,800 Telephone bill paid for month, $65Credit card balance, $235 Loan payment, $80Auto insurance, $230 Household possessions, $3,400Video equipment, $2,350 Payment for electricity, $90Lunches/parking at work, $180 Donations, $160Personal compute
Answer:
Assets
Monthly take-home salary $2,185
Cash in checking account $450
Savings account balance $1,890
Current value of automobile $8,800
Household possessions $3,400
Video equipment $2,350
Total Assets: $19,075
Liabilities
Rent for the month $650
Spending for food $345
Balance of educational loan $2,160
Telephone bill paid for month $65
Credit card balance $235
Loan payment $80
Auto insurance $230
Payment for electricity $90
90Lunches/parking at work $180
Donations $160
Total Liabilities: $4,195
Net Worth = total assets - total liabilities
Net Worth = $19,075 - $4,195
Net Worth = $14,880
Cash inflows
Monthly take-home salary $2,185
Total cash inflows: $2,185
Cash outflows
Rent for the month $650
Spending for food $345
Telephone bill paid for month $65
Loan payment $80
Auto insurance $230
Payment for electricity $90
90Lunches/parking at work $180
Donations $160
Total cash outflows: $1,800
A manufacturer of hardboard and fiber cement sidings and panels purchased new equipment for its new product line for $20,000. A declining balance depreciation at a rate of 1.5 times the straight line rate with a 5-year recovery period and an estimated salvage value of $8000 was used to write off the capital investment. The company expects to realize net revenue of $57,000 each year for the next 5 years. However, due to the sudden change in business direction, the company decided to sell the equipment after 2 years of operation for $21,000. Assuming an effective tax of 40% and an after-tax MARR of 12% per year, calculate the future worth of the after-tax cash flow at the end of year 2.(HINT: skip $ and comma symbols) Year BTCF ATCF 0 -20000 -20,000 1 57,000 36,600.00 2a 57,000 35,880.00 2b 25579 ...
Answer:
Hello from your question there is a mix up of the figures for the BTCF AFTER 2 years and the BTCF given in the table so i would work with the value contained in the table i.e ( 25579 )
answer : 71052
Explanation:
Declining balance amount can be expressed/calculated using this formula a
[tex]\frac{1.5}{N} ; d_{k} = B ( 1 - k )^{k-1} (R ) ;\\ Bv_{k} = B ( 1 - R )^{k}[/tex] also R = 1.5 / 5 = 0.3 , k = 2 years
therefore Bv[tex]_{2}[/tex] = 20000 ( 1 - 0.3 [tex])^{2}[/tex] = 9800
Mv = 25579
Recapturing depreciation = Mv - Bv = 25579 - 9800 = 15779
BTCF is calculated as = ( capital investment + GI - expense incurred )
TI = GI - Expense - Depreciation + Depreciation recapture + capital gain
ATCF = BTCF - taxes
taxes = TI (l)
The future worth of the after-tax cash flow at the end of Year 2
Fw = -20000(f/p,12%,2) + 36600(f/p,12,1) + 35880 + 19268
= -20000(1.2544) + 36600(1.1200) + 55148 = 71052
attached below is the complete table used for the calculation
For each timing difference listed, identify whether the difference would be reported on the book side of the reconciliation or the bank side of the reconciliation. In addition, identify whether the difference would be an addition or subtraction.
a. Deposit in transit
b. Bank collection
c. Debit memorandum
d. EFT cash receipt
e. Outstanding checks
f. $1,000 deposit erroneously recorded by the bank as $100
g. Service charges
h. Interest revenue
i. $2,500 cash payment for rent expense erroneously recorded by the business as Bank $250
j. Credit memorandum from bank
Answer:
a.bank reconciliation, addition
b.book side, addition, subtraction
c.book side, subtraction
d.book side, addition
e.bank reconciliation, subtraction
f.bank reconciliation, subtraction
g.book side, subtraction
h.book side, addition
i.book side, subtraction
j.book side, addition
Explanation:
In book side, we enter transactions that were recorded by the company`s bank but not included in the cash book. These include service charges and interest revenue on bank account.Also errors made in cash book are recorded here.
In the bank reconciliation side, we record deposits and receipts entered in the cash book not yet reflecting in the bank statement and other errors related to construction of the bank statement.