Answer:
The value of inventory is $1600.
Explanation:
The business has two inventory on hand that cost $300 each so total value of inventory = 2 × 300 = $600
The value of four items at $400 each = 4 × 400 = $1600
Total number of items = 2 + 4 = 6
Total value of 6 items = 600 + 1600 = $2200
The value of sold inventory = 2 × 300 = $600
The value of inventory = total value of inventory - The value of sold inventory
The value of inventory = $2200 - $600
The value of inventory = $1600
Ship Co. produces storage crates that require 34.0 meters of material at $0.20 per meter and 0.30 direct labor hours at $19.00 per hour. Overhead is applied at the rate of $16 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?
Answer:
Total standard cost = $103.7
Explanation:
Standard cost is the sum of the standard material cost , standard labour cost and standard overhead
Overhead = OAR × direct labour hour
= $16 × (0.30×$19.00)= 91.2
Standard cost = (34.0×$0.20) + (0.30×$19.00) + 91.2 = $103.7
Standard cost = $103.7
ABC Appliance offers a warranty requiring an annual fee. The warranty may be purchased at the time of sale or at any time within the first year after the appliance was purchased. The warranty fee after the date of purchase is twice the time-of-purchase fee. When asked why the fee was higher after the date of purchase, ABC's president said, "Buying a warranty is voluntary. We've noted that those who buy the warranty after the purchase date have a greater need for service." Charging the same rate or a lower rate after the date of purchase would expose ABC to what problem that also impacts private insurers?
Answer: adverse selection
Explanation:
Adverse selection is a situation whereby the sellers possesses information that the buyers do not have. It may also be the other way round whereby the buyers have information which the sellers don't have regarding the quality of a product.
There is information failure between both parties; typically, it's usually the sellers who has more information. Therefore, base on the scenario above, charging same rate or lower rate after the date of the purchase would expose ABC to adverse selection problems.
Your uncle lends you $2,000 less $100 (interest at 5 percent), and you receive $1,900. Use the APR formula to find the true annual percentage rate. Assume you repay the entire loan in one year
Answer:
APR =5.263%
Explanation:
Computation of the true annual percentage rate
Using the APR formula to find the true annual percentage rate
APR=(2 × n × I) / [P × (N + 1)]
Hence;
APR= (2 × 1 × $100) / [$1,900 × (1 + 1)]
APR=$200/($1,900×2)
APR=$200/$3,800
APR= 0.05263 ×100
APR =5.263%
Therefore the true annual percentage rate using the APR formula will be 5.263%
Brooke Hubert works for MRK all year and earns a monthly salary of $ 11 comma 900. There is no overtime pay. Brooke's income tax withholding rate is 10 % of gross pay. In addition to payroll taxes, Brooke elects to contribute 5 % monthly to United Way. MRK also deducts $ 125 monthly for co-payment of the health insurance premium. As of September 30, Brooke had $ 107 comma 100 of cumulative earnings. LOADING...(Click the icon to view payroll tax rate information.) Requirements 1. Compute Brooke's net pay for October. 2. Journalize the accrual of salaries expense and the payments related to the employment of Brooke Hubert.
Answer:
1. Compute Brooke's net pay for October
Brooke's gross monthly salary = $11,900
- federal income taxes withholdings = ($1,190)
- contribution to United Way = ($595)
- health insurance = ($125)
- social security = 6.2% x $11,900 = ($737.80)
- medicare = 1.45% x $11,900 = ($172.55)
net pay = $9,079.65
2. Journalize the accrual of salaries expense and the payments related to the employment of Brooke Hubert.
We must include here FUTA taxes paid by the employer. In this case, since we are not given the state unemployment (SUTA) tax rate, we can only calculate the federal unemployment tax 6% x $11,900 = $714. Both the employee and employer pays FICA taxes in an equal amount. The amount that is withheld from the employee's paycheck is identified as FICA tax withholding.
October 31, 202x
Dr Wages expense 11,900
Dr FICA taxes expense 910.35
Dr FUTA taxes expense 714
Cr Federal income tax withholding payable 1,190
Cr FICA tax (social security) withholding payable 737.80
Cr FICA tax (social security) payable 737.80
Cr FICA tax (medicare) withholding payable 172.55
Cr FICA tax (medicare) payable 172.55
Cr FUTA tax payable 714
Cr Health insurance payable 125
Cr United Way payable 595
Cr Wages payable 9,079.65
Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $176,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $35,000.
What is its approximate internal rate of return?
Answer:
i think the answer218
Explanation:
if you add 176.000+35.000=211+7=218 you get the right answer
The approximate internal rate of return is 176.000+35.000=211+7=218. From calculating the cost and salvage value we get the internal rate of return.
What is internal rate of return?In financial analysis, the internal rate of return (IRR) is a statistic used to calculate the profitability of possible investments. IRR is a discount rate that, in a discounted cash flow analysis, reduces all cash flows' net present values (NPV) to zero. The same formula is used for NPV calculations and IRR calculations.
A useful tool for comparing investments is the internal rate of return (IRR), which is the interest rate at which the sum of all cash flows equals zero. If we substitute 13.92% for the 8% in the aforementioned case, NPV will be zero, and that represents your IRR. IRR is therefore defined as the discount rate at which a project's NPV equals zero.
IRR can be used to rank a variety of potential investments or projects on a pretty even basis because it is consistent for investments of all types. Generally speaking, the investment with the highest IRR would be regarded as the best when comparing options with other similar attributes.
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Yosko Company expects to sell 2 comma 000 units of finished product in January and 2 comma 150 units in February. The company has 260 units on hand on January 1 and desires to have an ending inventory equal to 40% of the next month's sales. March sales are expected to be 2 comma 270 units. Prepare Yosko's production budget for January and February.
Answer:
Production budget
January 2,600 units
February 2,198 units
Explanation:
The sales budget is adjusted for the projected opening and closing inventories unit to arrive at the production budget:
The production budget can be determined using the formula below
Production budget = Sales budget + closing inventory- opening inventory
January production budget
Sales budget = 2,000 units
Closing inventory = 40% × February sales = 40% × 2,150
Opening inventory = 260 units
Production budget for January = 2000 + (40% × 2,150) - 260= 2,600 units
February production budget
Sales budget = 2,150
Opening inventory = January closing inventory = 860 units
Closing inventory = 40% × March sales= 40% × 2,270
Production budget fro February = 2,150 + (40% × 2,270) - 860= 2,198 units
Production budget
January 2,600 units
February 2,198 units
Production estimates for July are as follows:
Estimated inventory (units), July 1 725
Desired inventory (units), July 31 1, 200
Expected sales volume (units), July 7,500
For each unit produced four hours of direct labor is required. The labor rate per hour is $15. The number of direct labor hours required for July production is:_________
Answer:
31,900
Explanation:
For the computation of the number of direct labor hours required for July production first we need to find out the production in units which is shown below:-
Production in units = Expected sales in Units + Ending Inventory - Beginning inventory
= 7,500 + 1,200 - 725
= 7,975
Total direct labor hours required = Production in units × Hours per unit
= 7,975 × 4
= 31,900
We simply applied the above formulas
Photo Framing's cost formula for its supplies cost is $1,200 per month plus $20 per frame. For the month of November, the company planned for activity of 618 frames, but the actual level of activity was 610 frames. The actual supplies cost for the month was $13,850. The spending variance for supplies cost in November would be closest to:
Answer:
Direct material spending variance= $451.4 unfavorable
Explanation:
Giving the following information:
Photo Framing's cost formula for its supplies cost is $1,200 per month plus $20 per frame.
Actual level of activity was 610 frames. The actual supplies cost for the month was $13,850.
To calculate the spending variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= (13,850 - 1,200)/610= $20.74
Direct material price variance= (20 - 20.74)*610
Direct material price variance= $451.4 unfavorable
In 2019, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The third employee worked only part-time and earned $4,000. The employer timely paid state unemployment tax equal to 5.4 percent of each employee's wages up to $7,000. How much FUTA tax is due from Willow Corporation for 2019, after the credit for state unemployment taxes
Answer:
FUTA tax due from the corporation is $108
Explanation:
The First and Second employee earned 7000 each
The Third employee earn earns 4000
Paid under State Unemployment Tax by the employer is = (7000+7000+4000) x 5.40% =$972
How much FUTA tax is due from Willow Corporation for 2019?
Credit of tax paid in State Unemployment Tax is availabe for FUTA tax of 6%, thus FUTA due will be:
=(6% of 18000) - $972
=1080-972
=$108
Increased Efficiency, Inc. is looking for ways to shorten its cash conversion cycle. It has annual sales of $36,500,000, or $100,000 a day on a 365-day basis. The firm's cost of goods sold is 65% of sales. On average, the company has $9,000,000 in inventory and $8,000,000 in accounts receivable. Its CFO has proposed new policies that would result in a 20% reduction in both average inventories and accounts receivable. She also anticipates that these policies would reduce sales by 10%, while the payables deferral period would remain unchanged at 40 days. What effect would these policies have on the company's cash conversion cycle
Answer and Explanation:
The cash conversion cycle refers to the cycle which includes the days inventory outstanding and days sales outstanding and deduct the days payable outstanding
The cash cycle = Days inventory outstanding + days sale outstanding - days payable outstanding
The computation is shown in the attachment below:
As we can see in the attachment the new proposed policy i.e 234.19 days would decrease the cash conversion cycle by 24.27 days as compared with the current proposal policy i.e 258.46 days
The due diligence process of analyzing and evaluating an existing business ________. Group of answer choices may be just as time consuming as the development of a comprehensive business plan for a start-up helps to determine if the company will generate sufficient cash to pay for itself and leave you with a suitable rate of return on your investment helps to determine what the company's potential for success is All of these
Answer:
All of these.
Explanation:
The due diligence process of analyzing and evaluating an existing business, is the process responsible for revealing the positive and negative aspects of a business.
This process aims to satisfy the buyer and seller by examining the main details of a transaction and ensuring its legality and evaluating most of the facts of the deal.
The agreement must then satisfy the due diligence aspects, so that the two parties involved can price and finalize the transaction effectively.
Therefore, all answer options are correct.
All projects are unique:________.
Select one:
A. Therefore all project management circumstances are equally unique.
B. So knowledge should not be transferred to avoid bias in future projects.
C. So knowledge cannot be transferred.
D. But they may have several common points.
Answer:
D. But they may have several common points
Explanation:
Although all projects are unique, they still share similar similarities. So knowledge can be transferred.
Question 16 (3 points) The 2011 and 2012 Balance Sheets for Jacob, Inc. contained the following entries: 12/31/201112/31/2012 Accounts receivable$206$116 Inventories$590$603 Net fixed assets$102$307 Accounts payable$329$333 Jacob had materials purchases in 2011 of $1,689 and materials purchases in 2012 of $2,770 . What did Jacob record as Cost of Goods Sold (COGS) on its 2012 income statement
Answer:
$2,857
Explanation:
Cost of goods sold (COGS) refers to the relevant cost incurred to acquire or produce the products being sold a company during a particular period.
The formula for calculating the COGS is as follows:
COGS = Beginning inventories + Purchases - Ending inventories
From the question, we have the following for 2012:
Beginning stock = $590
Purchases = $2,770
Ending inventory = 503
Therefore, we have:
COGS for 2012 = $590 + $2,770 - $503 = $2,857
Therefore, Jacob should record $2,857 as Cost of Goods Sold (COGS) on its 2012 income statement.
There is often litter along highways but rarely in people's yards. Which of the following statements help explain this observation?
a. Littering on the highway generates a positive externality.
b. The private cost of littering on the highway is low.
c. The private cost of littering on your own yard exceeds the social cost.
Answer:
The answer is A and C
Explanation:
Solution
Social costs refers to the total cost of an activity incurred by society.
Private costs are direct costs incurred by an individual
Frequently there is liter along the high ways but rarely in people's yards because the social cost of littering is more than private cost. since the society must bear the negative externality, the social cost is more and the private cost is less.
The private cost is higher when one liters on his own yard as the cost is only borne or carried by the owner and not the society.
A firm is considering a replacement project which requires the initial outlay of $300,000 which includes both an after-tax salvage from the old asset of $12,000 and an additional working capital investment of $8,000. The 12-year project is expected to generate annual incremental cash flows of $54,000 and have an expected terminal value at the end of the project of $20,000. The cost of capital is 15 percent, and the firm's marginal tax rate is 40 percent. Calculate the net present value of this project.
Answer:
-3,548.43
Explanation:
DF = Discount factor
Year Cash flow DF(15%) Present Value
0 (300,000) 1 -300,000
1 54,000 0.870 46,956.52
2 54000 0.756 40,831.76
3 54000 0.658 35,505.88
4 54,000 0.572 30,874.68
5 54000 0.497 26,847.54
6 54000 0.432 23,345.69
7 54000 0.376 20,300.06
8 54000 0.327 17,652.70
9 54000 0.284 15,350.17
10 54000 0.247 13,347.97
11 54000 0.215 11,606.93
12 74000 0. 187 13,831.13
Year 12 calculation = 54000 +20000 x 0.6 + 8000
= 74000
NPV = -300,000 + 46,956.52 + 40,831.76 + 35,505.88 + 30,874.68 + 26,847.54 + 23,345.69 + 20,300.06 + 17,652.70 + 15,350.17 + 13,347.97 + 11,606.93 + 13,831.13
NPV = -3,548.43
Riviera Township reported the following data for its governmental activities for the year ended June 30, 20X9: Item Amount Cash and cash equivalents $1,000,000 Receivables 300,000 Capital assets 8,500,000 Accumulated depreciation 1,200,000 Accounts payable 400,000 Long-term liabilities 4,000,000 Additional information available is as follows: All of the long-term debt was used to acquire capital assets. Cash of $475,000 is restricted for debt service. 1) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for total net assets?A) $2,425,000B) $4,200,000C) $2,900,000D) $3,625,0002) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets invested in capital assets, net of related debt?A) $4,200,000B) $2,900,000C) $2,825,000D) $3,300,0003) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets, unrestricted?A) $425,000B) $900,000C) $525,000D) $825,000
Answer:
1. B) $4,200,000
2. D) $3,300,000
3. B) $900,000
Explanation:
1. Total net assets = Total assets - Total Liabilities
=(1,000,000+300,000+8,500,000) - (1,200,000 + 400,000 + 4,000,000)
=9,800,000 - 5,600,000
=$4,200,000
2. The amount that should be reported for net assets invested in capital assets, net of related debt is
=(Capital assets- Accumulated Dep) - Long term debt
=(8,500,000 - 1,200,000) - 4,000,000
=7,300,000 - 4,000,000
=$3,300,000
3. The amount that should be reported for net assets, unrestricted is
=Total Net assets - Net of related debt
=4,200,000 - 3,300,000
=$900,000
Ski West, Inc., operates a downhill ski area near Lake Tahoe, California. An all-day adult lift ticket can be purchased for $85. Adulit customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typically runs from December 1 through April 30. Ski West expects its season pass holders to use their passes equally throughout the season. The company's fiscal year ends on December 31. On November 6, 2018, Jake Lawson purchased a season pass for $450.1. What will be included in the Ski West 2018 Income statement and balance sheet related to the sale of the season pass to Jake Lawson? Complete this question by entering your answers in the tabs below. 2. When should Ski West recognize revenue from the sale of its season passes?3. Prepare the appropriate ournal enteries that Sky West would record on November 6 and December 31.
Answer:
Ski West, Inc.
1. What Ski West 2018 should include in its Income statement and balance sheet related to the sale of the season pass to Jake Lawson?
a) Income Statement:
Season Passes Revenue = $90 ($450/5). This represents December season pass by Jake Lawson.
b) Balance Sheet:
Unearned Season Passes Revenue $360 as a current liability.
2. When Ski West should recognize revenue from the sale of its season passes:
Revenue should be recognized on December 31.
3. Journal Entries on November 6 and December 31:
November 6:
Debit Cash Account $450
Credit Unearned Season Passes Revenue $450
To record the receipt from Jake Lawson.
If this sale was on account, then the Accounts Receivable is debited instead.
December 31:
Debit Unearned Season Passes Revenue $90
Credit Season Passes Revenue $90
To record the earned revenue from Jake Lawson's.
Explanation:
Unearned revenue is not recognized in the income statement. It is taken to the Balance Sheet as a current liability. It is not recognized because it does not belong to the current period, as specified by the accrual concept and matching principle.
Dolan Company's accounting records reflect the following inventories:
Dec.31, 2013 Dec.31, 2012
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
Finished goods inventory 190,000 150,000
During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.
Dolan Company's total manufacturing costs incurred in 2013 amounted to________.
Answer:
cost of goods manufactured= $1,770,000
Explanation:
Giving the following information:
Dec.31, 2013 Dec.31, 2012
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials used + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 300,000 + (310,000 + 600,000 - 260,000) + 500,000 + 480,000 - 160,000
cost of goods manufactured= $1,770,000
QS 9-13 Note receivable interest and maturity LO P4 On December 1, Daw Co. accepts a $12,000, 45-day, 7% note from a customer. (1) Prepare the year-end adjusting entry to record accrued interest revenue on December 31. (2) Prepare the entry required on the note's maturity date assuming it is honored. (Use 360 days a year.)
Answer and Explanation:
The journal entries are shown below;
a. Interest receivable Dr ($12,000 × 7% × 30 days ÷ 360 days) $70
To Interest revenue $70
(Being the interest revenue is recorded)
For recording this we debited the interest receivable as it increased the asset and credited the interest revenue as it also increased the revenue
b. Cash Dr $12,105
To interest receivable $70
To interest revenue ($12,000 × 7% × 15 days ÷ 360 days) $35
To Note receivable $12,000
(being cash received is recorded)
For recording this we debited the cash as it increased the assets and credited the interest receivable, interest revenue and note receivable as it decreased the asset and increased the revenue
Zappos' product selection includes performance athletic shoes, outdoor coats, contemporary shirts, couture accessories, and more. This selection best illustrates the firm's:
Answer:
Product mix breadth
Explanation:
Product mix breadth refers to varieties of products offer for sale by a store. In a product mix breadth, all products being produced by a brand or company are sold.
Although, product mix breadth comprises varieties of product line, yet it is made up of all products produced and distributed by a company. For example, a store will little space or limited finance may opt to sell fewer product lines but would also make more choices available from the product lines being sold.
According to the Phillips curve, policymakers could reduce both the inflation rate and the unemployment rate by Group of answer choices increasing the money supply. raising taxes. increasing government expenditures None of the other answers is correct
Answer:
None of the other answers is correct.
Explanation:
Williams A. Phillips was a notable economist born in New Zealand. Phillips wrote a famous article titled "The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957" published in 1958 by Economica. In the article, he used data for the United Kingdom (U.K) to illustrate on a graph, a negative or inverse relationship between the rate of change of employee wages in the U.K and the unemployment rate in the United Kingdom (U.K).
Consequently, using the Phillips curve it is practically impossible for policymakers to reduce both the inflation rate and the unemployment rate because as the inflation rate decreases; the unemployment rate increases and vice-versa.
However, according to the Phillips curve, policymakers can reduce inflation and increase unemployment if aggregate demand is contracted.
Which of the following statements is most correct? a. All else equal, if a bond’s yield to maturity increases, its price will fall. b. All else equal, if a bond is down graded by the rating agencies its yield to maturity will increase. c. If a firm has two bond issues that are identical except one is subordinate to the other, the subordinate issue will have a higher yield to maturity than the other issue. d. A B and C are correct. e. None of the above are correct
Answer: d. A B and C are correct.
Explanation:
A bond's price and it's Yield to Maturity (YTM) are inversely related such that when Yield to Maturity rises, the price of the bond falls. This is a because a higher YTM signifies that the bond is riskier so it will compensate by being cheaper.
If a bond is downgraded by Ratings agencies then it means that the bond is now riskier. As it is riskier investors will charge more interest for taking on the risk. The interest is the YTM and so it rises.
A Subordinate bond means that if the company were to go into bankruptcy for instance, the Subordinate bond would only be paid for after the bond that is not Subordinated. This means that there is a chance that Subordinate bond holders will not get anything from the liquidation of the company. Investors will therefore charge a higher YTM to cater for the risk that this happens.
Six years ago, James Corporation sold a $100 million bond issue to expand its facilities. Each debenture has a $1,000 par value, an original maturity of 20 years (there are now 14 years left to maturity), and an annual coupon rate of 11.5% with semiannual payments. If you require a 14% return, what price would you pay today for a James bond?
Answer:
Price of Bonds=$848.286
Explanation:
The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate
Value of Bond = PV of interest + PV of RV
The value of bond for James Corporation can be worked out as follows:
Step 1
PV of interest payments
PV = A × (1+r)^(-n)/r
A- semiannual interest payment, n-number of periods, r- semi annul yield
A-semi- annul interest payment:
=11.5%× 1,000× 1/2 = 75
r-semi-Annual yield = 14%/2 = 7%
n-Maturity period =1 4 × 2= 28
PV of interest payment:
=57.5 × (1- (1+0.07)^(-28)/0.07)
= 697.88
Step 2
PV of Redemption Value
= 1,000 × (1.07)^(-28) = 150.40
Step 3
Price of bond
=697.88 + 150.40
=$848.286
Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is pequals 160minus2 q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20 , which is the marginal cost his round imposes on the Club. What membership fee would maximize profit for the Club? The manager could have charged Joe a single price per round. How much extra profit does the Club earn by using two-part pricing? The profit-maximizing membership fee (F) is $nothing . (Enter your response as a whole number.)
Answer:
Club membership fee of $60 would maximize profit.
If the club charges tow part pricing the maximum revenue can be $3500.
Explanation:
Joe has entered into a monopoly because he is owner of single golf course in the Northlands.
Demand function for Joe's golf course is:
P = 160 - 2q
P = $20 , q = 50
160 - 2 (50) = 60
Consumer surplus = 0.5 * equilibrium quantity
Consumer Surplus for Joe is ; 0.5 * 50 (160 - 20) = $3500
If MR = MC then demand function will become :
160 - 4q
If q = 25 then
160 - 4 * 25 = 60
Collins Company borrowed $1,250,000 from BankTwo on January 1, 2016 in order to expand its mining capabilities. The five-year note required annual payments of $325,545 and carried an annual interest rate of 9.5%. What is the amount of expense Collins must recognize on its 2017 income statement
Answer:
Collins Company must recognize $118,750 (which is annual interest paid on the capital) in its 2017 income statement as an expense item if the method of computing the interest is the flat rate method.
If it is reducing balance rate, then the amount deducted will equal $ 87,823
Explanation:
According to the principles of Financial Accounting, the interest portion of any loan must be entered as an expense item. The portion of the principal being paid back is recorded as part of the liability of the company in the period under consideration. It often goes by the term Loan Payable or Notes Payable.
Hence to arrive at the answers given above, you must note that the year in question is 2017 and that the loan took effect from January 2016.
When computing for interest payable, two methods may be used:
Flat rate method: which requires that the interest rate applicable is computed on the capital and multiplied by the number of years the loan will run.That is, $1,250,000 x 9.5% x 5 = Total Interest Rate Applicable.
= $593,750 so going by this method, the interest rate to be entered is
= $593, 750/5
= $118,750
2. Reducing balance rate method: This requires the rate of interest to be applied each year succesievely having taken into account the capital which way paid in the previous year.
That is, [Initial Capital-Annual Payments] *9.5%
For year 2016, annual payment will be Zero. Given that the loan started in that year. In 2017 however, the annual payment will apply as shown below:
= [$1,250,000-$325,545] *9.5%
= $924, 455 * 9.5%
= $87,823 (approximately)
Cheers!
Motorzone offers replacement parts for old Volkswagen Beetles. The company calculates shipping charges based on shipping parts from Boston, even though some parts actually ship from St. Louis. Motorzone most likely practices ________ pricing.
Answer:
basing-point
Explanation:
Basing point pricing is a system used to establish prices in which the business charges a fixed amount for the product and an additional charge for the shipping that is determined according to the customer's distance from a certain place that is called the basing point. According to this, the answer is that Motorzone most likely practices basing-point pricing because they establish the shipping charges based on a pre-determined location even though some products are not in this place.
Tactical decisions define Group of answer choices the day-to-day activities of the organization. the goals and plans of the organization. the domain of operations managers, who are close to the customer. the steps taken to achieve the goals and objectives.
Answer:
E. the steps taken to achieve the goals and objectives.
Explanation:
Tactical decisions are the decisions made by the mid-level management in an organization, in a bid to implement the strategic plans of the director-general of the organization. These decisions are made and implemented within a short period of time. Some tactical decisions include;
1. Structuring of workforce
2. Purchase of items and resources
3. Marketing strategies
4. Allocation of jobs to employees.
When these decisions are made by the middle-level management, they are under obligation to answer to the directors of the organization as to how these decisions were implemented.
Daniel acquires a 30 percent interest in the PPZ Partnership from Paolo, an existing partner, for $48,000 of cash. The PPZ Partnership has borrowed $19,000 of recourse liabilities as of the date Daniel bought the interest. What is Daniel's basis in his partnership interest
The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: Jan. 1 Inventory $ 360,000 Jan. 1 to Dec. 31 Purchases (net) 2,870,000 Sales 4,470,000 Estimated gross profit rate 30% A. Estimate the cost of the inventory destroyed. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. B. In which situations would the gross profit method be useful
Answer:
A. Estimate the cost of the inventory destroyed is $101,000
B. Gross profit method would be useful in estimating the cost of merchandise destroyed by the fire.
Explanation:
Particulars Debit ($) Credit ($)
Beginning merchandise inventory 360,000
Add: Net purchase 2,870,000
Merchandise available for sale 3,230,000
Less: Net sales 4,470,000
Estimated gross profit (30%) (1,341,000)
Estimated cost of merchandise sold 3,129,000
Estimate the cost of the inventory destroyed 101,000
Using both the supply and demand for bonds and liquidity preference framework, show how interest rate are affected when the riskiness of bonds rises. Are the results the same in the two frame works
Answer:
Yes, the results are the same in both frameworks. Please see below for explanation.
Explanation:
With regards to the bond supply and demand framework, people will look to buy more bonds since they are more wealthy now. Hence, the supply of bonds will increase. The supply curve and the demand curve will both move to the right, with the former shifting more than the latter. The equilibrium interest rate will increase.
With regards to the liquidity preference framework, once the economy experiences a positive shift, there will also be an increase in the demand for money. People will make an increased number of transactions as well and hence, the demand curve will move towards the right. The equilibrium interest rate will rise too.