Answer:
Pecan Pies
Pauline
a. Summary of the flow of physical units:
Beginning Work in process = 209,000
Started during month = 1,025,000
less ending work in process 159,000
Units completed in month = 1,075,000
b. Computation of output in terms of equivalent units:
Units completed:
Physical Direct Conversion
Unit Material Cost
Determination of equivalent units:
less ending work in process 159,000 103,350 (65%) 127,200 (80%)
Units produced 1,075,000 1,075,000 (100%) 1,075,000 (100%)
Explanation:
Data:
Physical Direct Conversion
Unit Material Cost
Beginning work in process 209,000
Ending work in process 159,000 65% 80%
Units started during the month 1,025,000
Total units in production 1,234,000 103,350 127,200
Determination of equivalent units:
less ending work in process 159,000 103,350 127,200
Units produced 1,075,000 1,075,000 1,075,000
a) The equivalent unit is the product of the class of unit in production multiplied by the percentage of completion. This forms the basis for allocating cost between a product's costs and the ending work in process. Calculating the equivalent units helps to determine accurate costs of units completed.
QS 10-9 Bond retirement by call option LO P4 On July 1, 2017, Advocate Company exercises an $6,400 call option (plus par value) on its outstanding bonds that have a carrying value of $329,600 and par value of $320,000. The company exercises the call option after the semiannual interest is paid on June 30, 2017. Record the entry to retire the bonds.
Answer: The answer has been attached.
Explanation:
The journal is an accounting book that is used to record the transactions that take place in a business.
The entry to retire the bonds have been recorded. It should be noted that the bonds payable and the premium on
the bonds payable are debited while
the gain on the retirement of bonds and cash was credited.
Kindly, check attached file.
According to the basic quantity equation of money, if price and output fall while velocity increases, then: Group of answer choices
Answer:
The quantity of money will fall as well.
Explanation:
According to the quantity theory of money, money supply (M) and price level (P) in an economy are in direct proportion to one another.
In other words, the percentage change in price level is proportionate to the percentage change in Money Supplied.
The formula is given as:
M*V= P*T
where, V = Velocity of money and T = volume of the transactions.
Cheers!
A newly created subsidiary sold all of its inventory to its parent at a profit in its first year of existence. The parent, in turn, sold all but 20 percent of the inventory to unaffiliated companies, recognizing a profit. The parent had no other sales during the year. The amount that should be reported as cost of goods sold in this year's consolidated income statement should be:
Answer: b. 80 percent of the amount reported as cost of goods sold by the subsidiary.
Explanation:
On the consolidated income statement, the amount that should be recorded for cost of goods sold is the amount that corresponds with the sale of the goods away from the company as a whole or rather sales to unaffiliated companies.
As a result of this, only 80% of the amount reported as cost of goods sold would be recorded in the consolidated income statement because it was 80% of the goods were sold to unaffiliated companies.
With perfect price discrimination the monopoly a. charges each customer an amount equal to the monopolist's marginal cost of production. b. eliminates all price discrimination by charging each customer the same price. c. eliminates profits and increases consumer surplus. d. eliminates deadweight loss.
Answer:
Option D, Eliminates the dead-weight loss.
Explanation:
Option D is correct because there is dead-weight loss under monopoly because it produces less as compared to perfect competition. Therefore, a monopolist eliminates this dead-weight loss by producing at the level where the marginal cost curve cuts the marginal revenue curve and charging each consumer their willingness to pay the amount
Fixed costs for a product are $60,000. The product itself sells for $4.00 and it costs $1.00 to make each product. How will the break-even point for the product change if the variable cost per unit goes up to $1.50?
Answer:
The break-even point in units will increase by 400 units.
Explanation:
Giving the following information:
Fixed costs= $60,000
Selling price= $4.00
Unitary variable cost= $1
First, we need to calculate the current break-even point for the current situation.
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 6,000 / (4 - 1)
Break-even point in units= 2,000 units
Now, the unitary variable cost is $1.5
Break-even point in units= 6,000 / (4 - 1.5)
Break-even point in units= 2,400 units
The break-even point in units will increase by 400 units.
Direct materials and direct labor of a company total $9300000. If manufacturing overhead is $4650000, what is direct labor cost?
Answer:
Cannot be determined from the information provided
Explanation:
Remember, the direct labor cost refers to costs which can be directly traced/connected to the production process such as wages/salaries for machine operators etc. However, the since the cost is summed up with the direct materials cost, it is difficult/impossible to determine what the direct labor cost is from having only a knowledge of manufacturing overhead cost; because the manufacturing overhead cost entails all indirect materials cost related to manufacturing not labor.
The December 31, 2018, balance sheet of Whelan, Inc., showed long-term debt of $1,420,000, $144,000 in the common stock account, and $2,690,000 in the additional paid-in surplus account. The December 31, 2019, balance sheet showed long-term debt of $1,620,000, $154,000 in the common stock account and $2,990,000 in the additional paid-in surplus account. The 2019 income statement showed an interest expense of $96,000 and the company paid out $149,000 in cash dividends during 2019. The firm's net capital spending for 2019 was $1,000,000, and the firm reduced its net working capital investment by $129,000.
What was the firm's 2019 operating cash flow, or OCF? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
Operating cash flow
Answer:
$606,000
Explanation:
For the computation of operating cash flow first we need to follow some steps which is shown below:-
Net New borrowing = Long-term Debt, 2019 - Long-term Debt, 2018
= $1,620,000 - $1420,000
= $200,000
Cash flow to creditors = Interest expense - Net new borrowings
= $96,000 - $200,000
= -$104,000
Net new equity = Common stock 2019 + Additional paid in surplus 2019 - Common stock 2018 + Additional paid in surplus 2018
= $154,000 + $2,990,000 - $144,000 - $2,690,000
= $310,000
Cash flow to stockholders = Dividend 2019 - Net new equity
= $149,000 - $310,000
= -$161,000
Cash flow from assets = Cash flow to creditors + Cash flow to stockholders
= -$104,000 + (-$161,000)
= -$265,000
and finally
Operating cash flow = cash flow from assets + Net capital spending + Change in Net working capital
= (-$265,000) + $100,000 + (-$129,000)
= $606,000
Kerch Co. had beginning net fixed assets of $216,510, ending net fixed assets of $211,680, and depreciation of $40,435. During the year, the company sold fixed assets with a book value of $7,966. How much did the company purchase in new fixed assets?
Answer:
$43,571
Explanation:
The computation of the purchase in a new fixed asset is shown below:
Beginning net fixed assets $216,510
Less: depreciation expenses -$40,435
Net fixed assets -$176,075
Less: book value of sold assets -$7,966
Net fixed assets $168,109
Closing net fixed assets $211,680
purchases of net assets during the year $43,571 ($211,680 - $168,109)
We simply applied the above format
Steven Corporation uses the FIFO method in its process costing system. Department A's beginning work in process inventory consisted of 15,000 unit, 100% complete with respect to materials and 40% complete with respect to conversion costs. The total cost of this inventory was $31,000. A total of 40,000 units were transferred out during the month. The costs per equivalent unit were computed to be $1.30 for materials and $2.20 for conversion costs. What was the cost of the units completed and transferred out?
A. $140,000
B. $131,700
C. $138,300
D. $118,500
Answer:
The cost of the units completed and transferred out is C. $138,300
Explanation:
FIFO method means that the units that were incomplete at the beginning of the period are the first to be completed followed by those started during the year.
The cost of of units completed and transferred is calculated as follows :
Cost in Opening Work In Process $31,000
Cost to Finish Opening Work In Process :
Raw Materials ( $1.30 × 0) $0
Conversion ($2.20 × (15,000 × 60%)) $19,800
Started and Completed ((40,000 - 15,000) × ($1.30 + $2.20)) $87,500
Total Cost of of units completed and transferred $138,300
Conclusion :
The cost of the units completed and transferred out is $138,300.
Rao Construction recently reported $30.00 million of sales, $12.60 million of operating costs other than depreciation, and $3.00 million of depreciation. It had $8.50 million of bonds outstanding that carry a 7.0% interest rate, and its federal-plus-state income tax rate was 25%. What was Rao's operating income, or EBIT, in millions.
Answer:
$14.4 million.
Explanation:
Since sales = $30.00 million
Operating costs excluding depreciation = $12.6 million
Depreciation = $3.0 million
Therefore; Operating income (EBIT) = Net earnings - Operating costs - Depreciation
= $30.00 - $12.6 - $3.0
= $14.4 million.
Direct Materials Purchases Budget
Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.08 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next four months as follows:
Units
July 3,500
August 4,400
September 4,900
October 6,300
Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.
Required:
Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total.
Langer Company
Direct Materials Purchases Budget
For July, August and September
July August September Total
Units to be produced
Direct materials per unit (ounces)
Production needs
Desired ending inventory (ounces)
Total needs
Less: Beginning inventory
Direct materials to be purchased (ounces)
Cost per ounce $0.1 $0.1 $0.1 $0.1
Total purchase cost $ $ $ $
Answer:
Direct Materials Purchases Budget For July, August and September
July August September
Units to be produced 3,500 4,400 4,900
Direct materials per unit (ounces) 15 15 15
Production needs 52,500 66,000 73,500
Desired ending inventory (ounces) 19,800 22,050 28,350
Total needs 72,300 88,050 101,850
Less: Beginning inventory 0 (19,800) (22,050)
Direct materials to be purchased 72,300 68,250 79,800
Cost per ounce $0.1 $0.1 $0.1
Total purchase cost $7,230 $6,825 $7,980
Explanation:
A purchases budget budget is used to determine the quantities and cost of purchases required for resale or use in production.
Thus shows quantities that must be purchased to meet expected production plus any increase in inventory levels that might be required.
You decide to invest in a portfolio consisting of 23 percent Stock X, 44 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio?
State of Economy Probability of State of Economy Return if State Occurs
Stock X Stock Y Stock Z
Normal 0.82 11.30% 4.70% 13.70%
Boom 0.18 18.60% 26.60% 18.10%
a. 1.80%
b. 4.90%
c. 6.13%
d. 2.41%
e. 7.15%
Answer:
b. 4.90%
Explanation:
the portfolio's return in a normal economy:
= (0.23 x 11.3%) + (0.44 x 4.7%) + (0.33 x 13.7%) = 9.119%
the portfolio's return in a booming economy:
= (0.23 x 18.6%) + (0.44 x 26.6%) + (0.33 x 18.1%) = 21.955%
weighted average return:
(0.82 x 9.119%) + (0.18 x 21.955%) = 11.42948%
standard deviation:
= {[0.82 x (9.119% - 11.42948%)²] + [0.18 x (21.955% - 11.42948%)²]}⁰°⁵
= (0.000437742 + 0.001994158)⁰°⁵ = 0.0024319⁰°⁵ = 0.049 = 4.9%
The standard deviation of a stock or a portfolio measures the risk of the stock or the portfolio. The lower the standard deviation, the less risky the stock or portfolio.
Because ________ often make it possible for young firms to provide services that are equivalent or superior to an incumbent, a new entrant may be able to serve a market more effectively, with more personalized services and greater attention to product details.
Answer:
B. Digital Technologies
Explanation:
The term that goes in the blank line is Digital Technologies. These technologies are various different electronic tools, systems, devices, and resources that allow the firm to generate, store, and process data. These devices and systems give the firms the ability to compete and have an edge over the bigger firms of the industry by using them in a unique and more effective way towards accomplishing their end-goal and improving the customer's experience.
Copper Burgers sells burgers with 0.5 lb meat on each burger. They expected to buy meat a $2.45/lb, but actually ended up paying $3.35/lb. They made 100 burgers this week, and actually used 52 lbs of meat. Calculate the Direct Materials Quantity Variance
Answer:
Direct material quantity variance= $4.9 unfavorable
Explanation:
Giving the following information:
Copper Burgers sells burgers with 0.5 lb meat on each burger. They expected to buy meat a $2.45/lb.
They made 100 burgers this week, and used 52 lbs of meat.
To calculate the direct material quantity variance, we need to use the following formula:
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 0.5*100= 50
Direct material quantity variance= (50 - 52)*2.45
Direct material quantity variance= $4.9 unfavorable
At December 31, Riverbed Corporation reports net income of $454,000. Prepare the entry to close net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
Dr Profit and loss account $454,000
Cr Retained earnings $454,000
Explanation:
Preparation of the Journal entry to close net income for Riverbed Corporation
Based on the information given we were told that the Corporation reports net income of the amount of $454,000 on December 31 this means the Journal entry to close the account will be recorded as:
Dr Profit and loss account $454,000
Cr Retained earnings $454,000
The journal entry is
Income Summary $454,000
Retained earnings $454,000
(Being Net income closed to retained earnings account)
Income Summary $454,000
Retained earnings $454,000
(Being Net income closed to retained earnings account)
Here the income summary is debited and credited to the retained earnings account.
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Which of the following is a typical complaint of host-country competitors (such as GM, Ford etc) against foreign firms (such as KIA in the US)?a) foreign firms burden the host-country with infrastructure requirements.b) foreign firms lure local workers away from host-country businesses.c) foreign firms do not have to obey host-country law and regulations.d) foreign firms receive financial support from host-country governments.
Answer:
Option (d) is the correct answer to this question.
Explanation:
The nation in which those State members or organizations are involved at the request of the state and/or foreign negotiation.
A foreign country 's government, in which a representative and foreign embassies live while on duty. The diplomat and staff serve their own country's values and policies while being host country guests.
Other options are incorrect because they are not related to the given scenario.
Sam owns 70 percent of the stock of Club Corporation. Unrelated individuals own the remaining 30 percent. For a stock redemption of Sam's stock to be treated as an exchange under the "substantially disproportionate" test, what percentage of Club stock must Sam own after the redemption
Answer: C.Any percentage less than 50 percent
Explanation:
In relation to the law on meeting the criteria to be treated as an exchange under the "substantially disproportionate" test as stipulated by U.S. Code § 302.Distributions in redemption of stock, Sam must own the lesser of 2 options of Club Corporation stock;
1. Less than 50% of the stock after the redemption
2. Less than 80% of Sam's previous ownership percentage
= 80% * 70%
= 56%
The lesser option is that of owning less than 50% so Sam must own less than 50% of stock after the redemption to meet the requirement to be treated as an exchange under the "substantially disproportionate" test.
On December 31 of the current year, Sam Company was merged into Paul Company. In carrying out the business combination, Paul Company issued 60,000 shares of its $10 par value common stock, with a fair value of $15 per share, for all of Sam Company's outstanding common stock. The stockholders' equity section of the two companies immediately before the business combination was:
Complete Question:
On December 31 of the current year, Sam Company was merged into Paul Company. In carrying out the business combination, Paul Company issued 60,000 shares of its $10 par value common stock, with a fair value of $15 per share, for all of Sam Company's outstanding common stock. The stockholders' equity section of the two companies immediately before the business combination was:
Paul Sam
Common Stock $500,000 $400,000
Additional Paid-in Capital 200,000 100,000
Retained Earnings 300,000 200,000
Assume that the transaction is accounted for using the acquisition method. In the consolidated balance sheet at the end of the next year, the Additional Paid-In Capital account should be reported at
A) $400,000.
B) $300,000.
C) $500,000.
D) $200,000.
Answer:
Option C. $500,000
Explanation:
The reason is that the new additional Paid In Capital will be calculated by taking the stock issuing company's Addition Paid-In Capital and the additional paid in capital arising from stock issue, which means that:
Addition Paid-In Capital after merger = Addition Paid-In Capital of Paul Company + Addition Paid-In Capital arising from shares issues
Here
Addition Paid-In Capital of Paul Company = $200,000
Addition Paid-In Capital arising from shares issues = 60,000 shares * ($15 per share - $10 per share) = $300,000
By putting above values in the equation, we have:
Addition Paid-In Capital after merger = $200,000 + $300,000
Addition Paid-In Capital after merger = $500,000
When you use multiple worksheets in Excel and you retrieve information from one to go to into another
A. Start by using the = in the cell where you wish to put the information.
B.Use the = in the cell where you wish to retrieve the information.
C. After locating the desired cell (with the information you wish to put in a different worksheet) and clicking on it, press Enter.
D. That information is often useful in summary sheets
Answer:
A. Start by using the = in the cell where you wish to put the information.
Explanation:
Click the cell you want to place the information, then enter the " = " sign in it. Move the cursor to the sheet from which you want to retrieve information and click the cell with the information you want to retrieve. Automatically excel displays that information on the first sheet.
The accourtant for Mega Stores, Inc, should have recorded the following correct entry Jan 15 Notes Receivable 243 Equipment 243he misunderstood the transaction and recorded an incorrect entry, Which of the following w rong entries pertaining to this transaction could have been detected as erroneous when using a trial balance? A) Jan 15 Equipment 243 Notes Receivable 243B) Jan 15 Notes Payable 243 Cash 243C) Jan 15 Notes Receivable 243 Equipment 234 D) Jan 15 Notes Receivable 234 Equipment 234
Answer:
C) Jan 15 Notes Receivable 243 Equipment 234
Explanation:
The trial balance is a summary of all the balances of the various transactions used by an entity. It is expected that the credits should equal the debits in a trial balance as the saying goes, "for every credit, there must be a corresponding debit"
A review of the options given shows that option C) Jan 15 Notes Receivable 243 Equipment 234 would show an error detectible by a trial balance as the credit does not correspond to the debit.
Given below is a numbered list of cost terms. For each of the definition statements that follow, place the number of the cost term in the blank that makes the statement a correct definition. Each cost term is used only once. Number List of Cost Terms:
1. Recurring; 2. Variable; 3. Fixed; 4. Sunk;
5. Opportunity; 6. Incremental; 7. Direct; 8. Non-recurring
a. ______costs are those that have occurred in the past and have no relevance to estimates of future costs and revenues.
b. ______costs are incurred because of the use of limited resources such that the ability to use those resources to monetary advantage in another way to foregone.
c. ______costs are those which are unaffected by changes in activity level over a feasible range of operations for the capacity available.
d. ______costs, in total, change in relation to the quantity of output or other measures of activity level.
e. ______cost refers to the additional cost that will result from increasing the output of a system by one or more units.
f. ______cost are those that are repetitive and occur when goods or services are produced on a continuing basis.
g. ______costs can be reasonably measured and allocated to a specific output or work activity.
h. _______costs are not repetitive even though the total expenditure may be cumulative over a relatively short period of time.
Answer:
The correct answers are the following:
a - 4 Sunk
b - 5 Opportunity
c - 3 Fixed
d - 2 Variable
e - 6 Incremental
f - 1 Recurring
g - 7 Direct
h - 8 Non-recurring
Explanation:
a) Sunk costs are those that have already occurred in the past and they can not be recovered again so therefore that they are not relevant at the time of taking decisions regarding the futue.
b) Opportunity costs are those that try to measure and show the sacrifice done at the time of making a decision when that sacrifice represents the best second option that the person could have done.
c) Fixed costs are those that are always the same amount and do not change with the activity level of the production of the company.
d) Variable costs are those that do change with the amount of activity level that the company has during the production process.
e) Incremental costs are those that increase the cost level of the production while the output level increases as well, so they are a concept on the margin.
f) Recurring costs are those that tend to repete continously in the production process so the company already know how much the amount of the cost is.
g) Direct costs are those that the company associates with the production process regarding the commodities and all the primary sources that are needed to produce the good and therefore that they impact directly in the production and in the cost of the final product.
h) Non-recurring costs are those that the company are not familiar with due to the fact that they do not repete often and therefore tend to happen once in a while.
Your company is trying to decide which of the two following devices should be selected.
Device A: costs $1,000 but can save $300 annually
Device B: costs $1,350 but can save $300 the first year, but savings is increased $50 annually thereafter.
Both devices have 5-year useful life and no salvage value
a) Draw cash flow diagram for each option
b) If interest rate is 7%, which device should your company purchase?
Answer:
a) Find the attached jpeg file for the cash flow diagram
b) The company should purchase Device B.
Explanation:
a) Draw cash flow diagram for each option
A project cash flow diagram is a tool that is used to present a visual representation of the cost of a project and cash it is expected to generate over a specified period of time. On the diagram, x-axis represents the year, and y-axis represents cash out flows and/or inflows.
Note: See the attached jpeg for the cash flow diagram.
b) If interest rate is 7%, which device should your company purchase?
To determine this, we compare the Net Present Value (NPV) of the 2 devices.
Note: See the attached excel file for the calculation of the NPVs of the two devices.
From the attached excel file, we have:
NPV of Device A = $230
NPV of Device B = $262
Decision: Since $262 NPV of Device B is greater than the $230 NPV of Device A, the company should purchase Device B.
The interest rate on loan would be an effective 5% per semiannual, compounded monthly. What is the APY(annual percentage yield)
Answer:
The APY is 10.43%.
Explanation:
The annual percentage yield (APY) can be described as the real rate of return that is earned on investment or a saving deposit considering the impact of compounding interest. It is different from a simple interest rate that does take into account the effect of compounding interest.
APY can be calculated using the following formula:
APY = [(1 + r)^n] - 1 ............................... (1)
Where, for this question;
r = monthly interest rate = 5% / 6 = 0.83%, or 0.0083
n = Number of compounding periods per year = 2 semiannual in a year * 6 months = 12
Substituting values into equation (1), we have:
APY = [(1 + 0.0083)^12] - 1
APY = 1.1043 - 1
APY = 0.1043, or 10.43%
Therefore, the APY is 10.43%.
clarissa wants to fund a growing perpetuity that will pay $5000 per year to a local museum, starting next year. She wants the annual amount paid to the museum to grow by 5% per year. Given that the interest rate is 8%, how much does she need to fun this perpetuity
Answer:
$166,666.67
Explanation:
Clarissa wants to take charge of finding a growing perpetuity that will pay a total amount of $5,000 per year to a local museum
She wants the annual amount paid to the museum to grow by 5% per year
= 5/100
= 0.05
The interest rate is 8%
= 8/100
= 0.08
Therefore, the amount used to fund the perpetuity can be calculated as follows
Pvo= $5,000/(0.08-0.05)
= $5,000/0.03
= $166,666.67
Hence Clarissa needs $166,666.67 to fund the perpetuity.
The 90-day forward rate for the euro is $1.07, while the current spot rate of the euro is $1.05. What is the annualized forward premium or discount of the euro?
Answer:
7.6 percent
Explanation:
The forward rate for the euro is $1.07
The current spot rate for the euro is $1.05
Therefore the annualized forward premium or discount of the euro can be calculated as follows
= forward rate/Current spot rate - 1 × 360/90
= $1.07/$1.05-1 × 360/90
= 1.0190-1×4
= 0.0190×4
= 0.076×100
= 7.6 percent
Hence the annualized forward premium or discount of the euro is 7.6 percent
When or how does a contract become a legal document and is binding on all parties involved?
Credit ratings affect the yields on bonds. Based on the scenario described in the following table, determine whether yields will increase or decrease and whether it will be more expensive or less expensive, as compared to other players in the market, for a company to borrow money from the bond market.
Cost of Borrowing Money from
Scenario Impact on Yield Bond Markets
A company's financial health improves.
There is an increase in the perceived
market ability of a company's bonds,
so the liquidity premium decreases.
XYZ Co.’s credit rating was downgraded
from AA to BBB.
A company uses debt to buy another company.
Such an event is called a leveraged buyout.
Answer:
Please find the detailed answer in the explanation section
Explanation:
1. A company's financial health improves -
In this situation, The yield will decrease.
Cost of borrowing will be less expensive.
2. There is an increase in the perceived market ability of a company's bonds, so the liquidity premium decreases -
The yield decreases
The cost of borrowing money from bond markets is less expensive
3. XYZ Co.’s credit rating was downgraded from AA to BBB -
The yield will increase.
Cost of borrowing will be more expensive
4. A company uses debt to buy another company such an event is called a leveraged buyout -
The yield will increase.
Cost of borrowing will be more expensive
26) A tenant wants to lease a building for $50,000 per year. She signs a five-year rental agreement that states that she will pay $25,000 every six months for the next five years. Draw the timeline for her rental payments, assuming she makes the first payment immediately?
Answer:
Please check the attached image for time line
Explanation:
A time orders series of event in a chronological order.
Because the tenant is paying money, it is cash outflow and thus would have a negative sign in front of it.
I hope my answer helps you
Today you purchase a $600 face-value, 8% coupon bond for $600. This bond matures over 10 years. What is the value of the cash flow in year 5?
Answer:
the value of the cash flow in year 5 is -$48
Explanation:
Cash flow in year 5 include a capital repayment and interest expense.This can be determined by constructing an amortization schedule from the data given.
The first step in constructing the amortization schedule is to find the Yield to Maturity.
Pv = -$600
Pmt = $600 × 8% = $48
P/yr = 1
N = 10
Fv = $600
YTM = ?
Using a Financial Calculator the Yield to Maturity is 8%.
then to determine the cash flow for year 5, we need the coupon amount (interest) and the amount of capital repayment.
Coupon $48
Capital $0
Total $48
Therefore the cash flow in year 5 is -$48.
You have $6,000 and will invest the money at an interest rate of .23 percent per month until the account is worth $11,200. How many years do you have to wait until you reach your target account value
Answer:
22.94 years
Explanation:
The formula to calculate the number of periods of time is:
n = ln(FV / PV)/ln(1+r), where
n= number of periods of time
FV= Future value= $11,200
PV= Present value= $6,000
r= interest rate= 0.0023*12 (to calculate the rate per year)= 0.0276
n=ln(11,200/6,000)/ln(1+0.0276)
n=0.624/0.0272
n=22.94
According to this, you have to wait 22.94 years until you reach your target account value.