Answer: D(x) / IN(a)
Explanation:
If one wanted to find out the average credit card debt per card holder then the correct formula would be:
= Amount of debt that all credit card holders carry / Number of credit card holders
As the amount of debt that all credit card holders carry is denoted by D(x) and the number of credit card holders is IN(a), the average credit card debt per card holder is:
= D(x) / IN(a)
If unit sales prices are $7 and variable costs are $5 per unit, how many units would have to be sold to break-even if fixed costs equal $8,000?
Answer: 4,000 units
Explanation:
The breakeven point of sales can be calculated by the formula:
= Fixed costs / Contribution margin
Contribution margin = Sales price - Variable cost
= 7 - 5
= $2
Breakeven point in sales:
= 8,000 / 2
= 4,000 units
MC Qu. 152 Adams Manufacturing allocates... Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $364,800; materials of $418,000 and direct labor of $228,000. During the year Adams incurred $426,000 in materials costs, $415,400 in overhead costs and $232,000 in direct labor costs. Compute the overhead application rate.
Answer:
$1.60 per direct labor hour
Explanation:
Overhead application rate = Budgeted Overheads ÷ Budgeted Activity
hence,
Overhead application rate = $364,800 ÷ $228,000
= $1.60 per direct labor hour
Harding Company is in the process of purchasing several large pieces of equipment from Danning Machine Corporation. Several financing alternatives have been offered by Danning: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Pay $1,160,000 in cash immediately. 2. Pay $461,000 immediately and the remainder in 10 annual installments of $94,000, with the first installment due in one year. 3. Make 10 annual installments of $156,000 with the first payment due immediately. 4. Make one lump-sum payment of $1,730,000 five years from date of purchase. Required: Determine the best alternative for Harding, assuming that Harding can borrow funds at a 8% interest rate. (Round your final answers to nearest whole dollar amount.)
Answer:
Option-2 is best alternative
Explanation:
Option-1
Present value of lumpsum amount -1160000
Option-2
Annual paymentt for 10 yrs -94000
Annuity for 10 yrs at 8% 6.7101
Present value of outflowws -630749
Add: Initial amount paid -461000
Present value of outflowws -1091749
Option-3
Annual paymentt for 9 yrs -156000
Annuity for 10 yrs at 8% 6.24689
Present value of outflowws -974515
Add: Initial amount paid -156000
Present value of outflowws -1130515
Option-4
Amount paid after 5 yrs -1730000
PVF at 5 yrs at 8% 0.680583
Present value -1177409
Option-2 is best alternative
During 2020, Morefield Building Company constructed various assets at a total cost of $14,700,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $10,700,000. The company had the following debt outstanding at December 31, 2020:
1. 10%, 5-year note to finance construction of various assets, dated January 1,
2020, with interest payable annually on January 1 $6,300,000
2. 12%, ten-year bonds issued at par on December 31, 2014, with interest payable
annually on December 31 7,000,000
3. 9%, 3-year note payable, dated January 1, 2019, with interest payable annually
on January 1 3,500,000
Instructions:
Compute the amounts of each of the following (show computations).
1. Avoidable interest.
2. Total interest to be capitalized during 2020.
Answer:
1. $1,015,000
2. $1,015,000
Explanation:
1. Computation for the Avoidable interest.
First step is to Compute the weighted average interest rate:
Principal Interest
12% ten-year bonds$ 7,000,000 $840,000
9% 3-year note $3,500,000 $315,000
Total $10,500,000 $1,155,000
Weighted average interest rate = $1,155,000 ÷ $10,500,000
Weighted average interest rate= 11%
Now let compute the Avoidable Interest
Weighted Average Accumulated Expenditures *Applicable interest rate = AVOIDABLE INTEREST
$6,300,000 *.10 = $630,000
$3,500,000 *.11= $385,000
Total $9,800,000 $1,015,000
Therefore the Avoidable Interest is $1,015,000
2. Computation for Total interest to be capitalized during 2020
2020 Actual interest cost
Construction note $6,300,000 × .10 =$630,000
12% ten-year bonds, $7,000,000 × .12 =$840,000
9% three-year note, $3,500,000 × .09=$315,000
Total $1,785,000
Therefore Total interest to be capitalized during 2020 will be $1,015,000 which is the LESSER of
$1,785,000
Larry estimates that the costs of insurance, license, and depreciation to operate his car total $460 per month and that the gas, oil, and maintenance costs are 33 cents per mile. Larry also estimates that, on average, he drives his car 2,000 miles per month.
Required:
a. How much cost would Larry expect to incur during April if he drove the car 1,545 miles? (Round your answer to 2 decimal places.)
b. Would it be meaningful for Larry to calculate an estimated average cost per mile for a typical 2,000-mile month?
a. Yes
b. No
Answer and Explanation:
a The computation of the cost is
= $460 + 1,545 miles × 0.33
= $460 + $509.85
= $969.85
b. It should not be considered as the meaningful as the fixed cost would remains the fixed i.e. $460 also the 0.33 per mile should be considered as the variable cost that change with the change in the no of miles covered
Therefore the same should be considered
On Mar 3, Lyons Company paid dividends of $1,000. Use your knowledge of what a correct journal entry should look like to identify what would be include
Answer:
Debit : Dividend $1,000
Credit : Cash $1,000
Explanation:
The Journal entry to record dividend payment include a Debit to Dividend Account and a Credit to Cash Account to depict the outflow of cash.
The Richmond Corporation uses the weighted-average method in its process costing system. The company has only a single processing department. The company's ending work in process inventory on August 31 consisted of 18,600 units. The units in the ending work in process inventory were 100% complete with respect to materials and 60% complete with respect to labor and overhead. If the cost per equivalent unit for August was $2.90 for materials and $4.40 for labor and overhead, the total cost assigned to the ending work in process inventory was: Multiple Choice $103,044 $81,468 $135,780 $86,676
Answer:
A. $103,044
Explanation:
Ending work in progress inventory = 18,600 units
Cost of equivalent unit for material = $2.90 per unit
Ending work in progress inventory i= 100% complete for material
Total cost of inventory for material = 18,600 units * $2.90 per unit
Total cost of inventory for material = $53,940
Cost of equivalent unit for labor = $4.40
Ending work in progress = 60% complete for labor
Cost of ending work in progress = $4.40 * 60% * 18,600
Cost of ending work in progress = $49,104
Total cost of ending work in progress inventory = $53,940 + $49,104
Total cost of ending work in progress inventory = $103,044
An investor currently holds stock in Giggle Corporation and is considering buying stock in either Macrosoft Corporation or Faceplant Corporation. All three stocks have the same expected return and risk. The correlation between Giggle & Macrosoft is 0.25. The correlation between Giggle and Faceplant is -0.10. Portfolio risk is expected to:
a. Increase regardless of whether she buys Macrosoft or Faceplant since they are equally risky
b. Decline more when the investor buys Faceplant
c. Cannot tell from information provided – need to know risk, return and proportion of each stock in the portfolio
d. Stay the same regardless of whether Macrosoft or Faceplant is added since all three have the same risk
e. Decrease more when the investor buys Macrosoft
Answer:
b
Explanation:
Portfolio diversification is the process of holding different asset and security classes in order to minimise the non systemic risk of the portfolio
Correlation is a statistical measure used to measure the relationship that exists between two variables.
1. Positive correlation : it mean that the two variables move in the same direction. If one variable increases, the other variable also increases. It increases the risk of the portfolio
For example, there should be a positive correlation between quantity supplied and price
When there is a positive correlation, the graph of the variables is upward sloping
2. Negative correlation : it mean that the two variables move in different direction. If one variable increases, the other variable decreases. It decreases the risk of the portfolio
For example, there should be a negative correlation between quantity demanded and price
When there is a negative correlation, the graph of the variables is downward sloping
3. Zero correlation : there is no relationship between the variables. It decreases the risk of the portfolio
Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $430,000 on sales of $1,300,000. The companyâs average operating assets for the year were $1,500,000 and its minimum required rate of return was 10%.
Required:Compute the companyâs residual income for the year.Average Operating Assets-Net Operating Income-Minimum required return-Residual income-
Answer: $280,000
Explanation:
Residual income can be calculated by the formula:
= Net operating income - (Average operating asset * Minimum required rate)
= 430,000 - (1,500,000 * 10%)
= 430,000 - 150,000
= $280,000
Favaz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $7; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $3; and fixed selling and administrative costs, $263,000. The company sells its units for $48 each. Additional data follow. Planned production in units 10,000 Actual production in units 10,000 Number of units sold 9,500 There were no variances. The income (loss) under absorption costing is
Answer:
Favaz
The income (loss) under absorption costing is
= $41,000.
Explanation:
a) Data and Calculations:
Variable manufacturing cost per unit, $7
Fixed manufacturing costs, $60,000
Variable selling and administrative costs per unit, $3
Fixed selling and administrative costs, $263,000
Selling price per unit = $48
Planned production in units = 10,000
Actual production in units = 10,000
Number of units sold = 9,500
Ending inventory = 500 (10,000 - 9,500)
Income Statement
Sales revenue ($48 * 9,500) $456,000
Cost of production:
Variable manufacturing $70,000 ($7 * 10,000)
Fixed manufacturing costs, 60,000
Total cost of production $130,000
Less Ending inventory 6,500 ($13 * 500)
Cost of goods sold 123,500
Gross profit $332,500
Expenses:
Variable selling and administrative
costs per unit, ($3 * 9,500) $28,500
Fixed selling and
administrative costs, 263,000
Total expenses $291,500
Net income $41,000
Bailey Company incurred the following costs in manufacturing desk calculators: Direct materials $18 Indirect materials (variable) 3 Direct labor 9 Indirect labor (variable) 7 Other variable factory overhead 13 Fixed factory overhead 34 Variable selling expenses 26 Fixed selling expenses 12 During the period, the company produced and sold 2,000 units. What is the inventory cost per unit using absorption costing
Answer:
$84
Explanation:
Calculation to determine the inventory cost per unit using absorption costing
Direct materials $18
Indirect materials (variable) $3
Direct labor $9
Indirect labor (variable) $7
Other variable factory overhead $13
Fixed factory overhead $34
Inventory cost per unit $84
($18 + $3 + $9 + $7 + $13 + $34 = $84
Therefore the inventory cost per unit using absorption costing is $84
Westside Plumbing and Heating Company is offered a contract for$100,000 to provide plumbing for a new building. The labor and equip-ment costs are calculated to be $60,000 for fulfilling the contract. West-side has materials in its inventory to complete the job. The raw ma-terials initially cost the firm $50,000; however the material prices havedeclined in the interim and now cost only $37,500. Thus if thefirmchose not to accept the contract and sells the materials, they wouldincur a loss of $12,500. Material prices are not expected to go up inthe future. Should Westside accept the contract. Explain your answer.
Answer:
Westside Plumbing and Heating Company
Westside should accept the contract.
By accepting the contract at the price of $100,000, Westside incurs a total cost of $97,500 and makes a little profit of $2,500 ($100,000 - $97,500). The contract enables Westside to utilize the materials that it has in inventory instead of allowing it to deteriorate further in value.
Explanation:
a) Data and Calculations:
Contract price = $100,000
Labor and equipment costs = $60,000
Original cost of materials = $50,000
Materials market price = $37,500
Total costs to be incurred = $97,500 ($60,000 + $37,500)
Profit to be earned = $2,500 ($100,000 - $97,500)
The Omega started the year with $650,000 in the common stock account and $1,318,407 in the additional paid-in surplus account. The end-of-year balance sheet showed $720,000 and $1,299,310 in the same two accounts, respectively. What is the cash flow to stockholders if the firm paid $68,500 in dividends
Answer:
$17,597
Explanation:
Calculation to determine the cash flow to stockholders
Using this formula
Cash flow to stockholders = Dividends paid - Common stock issued
Let plug in the formula
Cash flow to stockholders= Dividends 68,500 - (1299,310+ 720,000)- (1318407+ 650000)
Cash flow to stockholders= Dividends 68,500 - (2,019,310-1,968,407)
Cash flow to stockholders= 68,500-50,903
Cash flow to stockholders= $17,597
Therefore the cash flow to stockholders if the firm paid $68,500 in dividends is $17,597
Eileen transfers property worth $200,000 (basis of $190,000) to Goldfinch Corporation. In return, she receives 80% of the stock in Goldfinch Corporation (fair market value of $180,000) and a long-term note (fair market value of $20,000) executed by Goldfinch and made payable to Eileen. Eileen recognizes gain on the transfer of:______.a. $0.b. $10,000.c. $20,000.d. $190,000.e. None of the above.
Answer:
b. $10,000
Explanation:
Calculation to determine Eileen recognizes gain on the transfer
Recognized gain=Basis -Fair market value
Recognized gain=$190,000 -$180,000
Recognized gain=$10,000 gain
Therefore Eileen recognizes gain on the transfer of:$10,000
Introduction to Business class is to observe the use of groups in a large manufacturing business . The students notice that most groups are arranged by reporting relationships . Bill discovers a group of managers who have been placed together to study and recommend a course of action on a flextime schedule for employees . Jane finds that the executives of the company have formed a team consisting of themselves , some middle managers , and a few hourly employees to work on improving work processes and efficiency within the company . This group has been in existence for 5 years and is going strong . Jane's group appears to be what type of group ?
A ) Informal group.
B ) Formal group.
C ) Ad hoc committee or task force.
D) Self - managing group.
Answer:
B). Formal Group
Explanation:
'Formal Group' is characterized as the work groups in which people work together to ensure the effective and efficient attainment of the desired goals. In the given situation, Jane's group would be characterized as a 'formal group' because in that group, different individuals come together from different sectors or departments(executives, managers, employees) and every individual is assigned with a set of responsibilities to be fulfilled so that the desired results(enhancement of the work processes and ensuring efficiency) are attained. Thus, option B is the correct answer.
If the subtotal of the income statement debit column is $250,000, the subtotal of the income statement credit column is $300,000, and the total of the Statement of Retained Earnings debit column is $475,000, what is the beginning balance in Retained Earnings
Answer:
$425,000
Explanation:
Calculation to determine the beginning balance in Retained Earnings
First step is to prepare the Income Statement
Revenues $300,000
Less Expenses ($250,000)
Profit $50,000
Now let calculate the beginning balance in Retained Earnings
Using this formula
Beginning balance in Retained Earnings= Statement of Retained Earnings debit column -Income Statement Profit
Let plug in the formula
Beginning balance in Retained Earnings=$475,000-$50,000
Beginning balance in Retained Earnings=$425,000
Therefore the beginning balance in Retained Earnings is $425,000
Turner's has $3.8 million in net working capital. The firm has fixed assets with a book value of $48.6 million and a market value of $54.2 million. Martin amp; Sons is buying Turner’s for $61.5 million in cash. The acquisition will be recorded using the purchase accounting method. What is the amount of goodwill that Martin amp; Sons will record on its balance sheet as a result of this acquisition?
a. $0
b.$3.5 million
c. $6.6 million
d. $7.2 million
e. $9.1 million
Your company is estimated to make dividends payments of $2.4 next year, $3.4 the year after, and $4.1 in the year after that. The dividends will then grow at a constant rate of 4% per year. If the discount rate is 13% then what is the current stock price
Answer:
40.78
Explanation:
A debit: Multiple Choice Always decreases an account. Is the left-hand side of a T-account. Is the right-hand side of a T-account. Is not needed to record a transaction. Always increases an account.
A debit side is the left-hand side of a T-account according to the Ledger's book of account.
The left side of the Account is always the debit side and the right side is always the credit side irrespective of what account is. Debit side represents money being paid out of a particular account. In the Ledger is a book of account, in which all types of accounts relating to assets liabilities, capital, expenses and revenues and maintained. it is a complete set of account of business enterprise.
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A justification for job training programs is that they improve worker productivity. Suppose that you are asked to evaluate whether more job training makes workers more productive. However, rather than having data on individual workers, you have access to data on manufacturing firms in Ohio. In particular, for each firm, you have information on hours of job training per worker (training) and number of non-defective items produced per worker (output).
Required:
a. Carefully state the ceteris paribus thought experiment underlying this policy question.
b. Does it seem likely that a firm’s decision to train its workers will be independent ofworker characteristics? What are some of those measurable and unmeasurable workercharacteristics?
c. Name a factor other than worker characteristics that can affect worker productivity.
d. If you find a positive correlation between output and training, would you haveconvincingly established that job training makes workers more productive? Explain.
Solution :
a). There is a way to state the question :
If there are two firms, firm A and firm B. Both the forms are same in all the respects but differ in only one thing, that firm A provides job training 1 hour per worker more than the number of hours of training of firm B, by how much the output of firm A would differ than the output from firm B?
b). The manufacturing firms that are located in Ohio will provide the job training based on the characteristics of workers. Some of the determining factors includes years of schooling, experience in a particular job, etc. The firms can even consider the worker's age, race or gender. The training will be provided to the less efficient workers based on their ability.
c). The amount of the capital as well as the technology that is available to the workers would affect the output of the firm. Thus the firms having the same kind of employees would have different outputs when the firms used different technology or different amount of capital.
d). No, unless the training is randomly assigned. The factors are listed above which can contribute to the finding of a positive correlation between the output and the training even when the job training does not improve the productivity of the worker.
On December 1, 2020, Junction Company issued at 104, 800 of its 9%, 10-year, $1,000 par value, nonconvertible bonds with detachable stock purchase warrants. Each bond carried two detachable warrants; each warrant was for one share of common stock at a specified option price of $15 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the bonds without the warrants. Interest is payable on December 1 and June 1. Provide the entry to record issuance of the bonds by Junction Company on December 1, 2020.
Answer:
Junction Company
Journal Entry
December 1, 2020:
Debit Cash $832,000
Credit Bonds Payable $800,000
Credit Bonds Premium $27,038
Credit Warrants Liability $4,962
To record the issuance of the bonds.
Explanation:
a) Data and Calculations:
December 1, 2020:
Face value of nonconvertible bonds with detachable stock purchase warrants = $800,000
Issue price of bonds = $832,000 (1.04 * 800 * $1,000)
Number of bonds issue = 800
Par value per bond = $1,000
Maturity period = 10 years
Coupon interest rate = 10%
Option price of each warrant = $15 per common stock share
Market price of the option = $3
Value of warrant = $4,800 ($3 * 800 * 2)
Allocation of bond price:
Bonds = $827,038 ($800,000/$804,800 * $832,000)
Warrants = $4,962 ($4,800/$804,800 * $832,000)
Roberto Company uses a perpetual inventory system. On December 1, the company purchased $3,300 of merchandise for cash Complete the following journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns
Journal entry worksheet 1 Roberto Company uses a perpetual inventory system. On December 1, the company purchased $3,300 of merchandise for cash. Note: Enter debits before credits General Journal Debit Credit Date Dec. 1 Record entry Clear entry View general journal
Answer:
Dr Merchandise Inventory for $3,300
Cr Cash for $3,300
Explanation:
Based on the information given assuming On December 1, the company purchased $3,300 of merchandise for cash which means that the appropriate journal entry to record these Transaction will be:
Dr Merchandise Inventory for $3,300
Cr Cash for $3,300
Read the following descriptions and identify the type of risk or term being described:
a. This type of risk relates to fluctuations in exchange rates.
b. This type of risk is inherent in a firmâs operations. A standard measure of the risk per unit of return. This can be used to reduce the stand-alone risk of an investment by combining it with other investments in a portfolio.
c. A standard measure of the risk per unit of return
d. This type of risk relates to fluctuations in exchange rates
Answer:
Foreign exchange risk
Explanation:
These are the risks that an international financial transaction could accrue because of fluctuations in the currency.
A standard measure of the risk per unit of return and this type of risk relates to fluctuations in exchange rates.
Therefore, according to the following descriptions, the type of risk or term being described is Foreign exchange risk.
A student is deciding whether to take an additional class or work extra hours. Which amounts are relevant to this decision
Answer:
a. Out-of-pocket costs
c. opportunity costs
Explanation:
Out of pocket costs are those that have to be incurred by the student for having to take the additional classes if there are any. This needs to be considered as they are a cost that the student will need to pay for to take the classes and therefore might need budgeting.
Opportunity costs are the returns offered by the next best alternative to the current decision being taken. In other words, the student needs to consider what will happen if they pick additional class over work and vice versa.
Answer:
pocket and opportunity
Explanation:
Suppose advances in computer technology lead to a surge in worker productivity. In the long run, output will ________ and the price level will ________.
Answer:
increase; decrease.
Explanation:
Technology can be defined as a branch of knowledge which typically involves the process of applying, creating and managing practical or scientific knowledge to solve problems and improve human life. Technologies are applied to many fields in the world such as medicine, information technology, cybersecurity, engineering, environmental etc.
Generally, technology has impacted the world significantly and positively as it has helped to automate processes, increased efficiency and level of output with little or no human effort.
Assuming advances in computer technology led to a surge in the level of productivity by the workers working in a company. In the long run, output will increase and the price level will decrease.
A risky fund has an expected return of 17% and standard deviation of 25%. The risk-free rate is 9%. The expected return of the optimal complete portfolio is 12%. The Sharpe ratio of the optimal complete portfolio is:
Answer:
the Sharpe ratio of the optimal complete portfolio is 0.32
Explanation:
The computation of the sharpe ratio is shown below:
= (Return of portfolio - risk free asset) ÷ Standard deviation
= (17% - 9%) ÷ 25%
= 8% ÷ 25%
= 0.32
Hence, the Sharpe ratio of the optimal complete portfolio is 0.32
We simply applied the above formula
________duties are tailored at the request of the Program Manager (PM) and are written in the Memorandum of Agreement, signed by both the PM and the Contract Administration Office (CAO) Commander (Please note the CAO Commander was previously referred to as the Contract Management Office (CMO) Commander).
a. Program Support Team
b. Administrative Contracting Officer
c. Program Integrator
d. Procuring Contracting Officer
Answer:
b. Administrative Contracting Officer
Explanation:
The officer who is given the responsibility of administering the U.S. government contracts in the Contract Administration Office is called the Administrative Contracting Officer (ACO). For the U.S. military, this office is led by the Contract Administration Office (CAO) Commander. The ACO in the CAO is just one of the officers under the CAO Commander, and she can negotiate contracts on behalf of the U.S. government.
explain consumptions of the principal of absolute advantage
Answer:
The Absolute Advantage Theory assumed that only bilateral trade could take place between nations and only in two commodities that are to be exchanged.
Explanation:
In economics, the principle of absolute advantage refers to the ability of a party (an individual, a firm, or a country) to produce more of a good or service than competitors while using the same amount of resources.
A French family flies from Paris, France to New York City where they have a brief layover before flying to Montreal, Canada. While in New York the family has a $25 dollar lunch at a hot dog stand near Time Square. How does this lunch contribute to U.S. GDP?
a. U.S. GDP remains unchanged, but French GDP increases by 22 Euros ($25 U.S.).
b. GDP decreases by $25
c. GDP increases by $25
d. GDP does not change since the family is not from the U.S.
Answer:
C
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Consumption spending includes spending by households on goods and services. Consumption spending includes :
spending on durables - e.g. buying a laptop
spending on nondurables - e.g. buying clothes, food
spending on services - e.g. payment of hospital bill
the purchase of a textbook by a student is an example of consumption spending on durable goods
Investment - It includes purchases of goods and services made by businesses in the production of goods and services
Government spending - It includes government consumption expenditure and gross investment. The purchase of a new limousine for the president is an example of consumption expenditure
Net export = export - import
the purchase of hotdog constitutes consumption of non durable goods and this would increase US GDP by $25
Universal Travel Inc. borrowed $498,000 on November 1, 2021, and signed a 12-month note bearing interest at 7%. Interest is payable in full at maturity on October 31, 2022. In connection with this note, Universal Travel Inc. should report interest payable at December 31, 2021, in the amount of
Answer: $2,905
Explanation:
The total interest that will be paid on the note is:
= 498,000 * 7%
= $34,860
This interest will have to be apportioned monthly over the year. The monthly interest (which will also be the December interest) is:
= 34,860 / 12 months
= $2,905
