Answers
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Is the sun a star?
A. Yesᴇxᴘʟᴀᴛɪᴏɴ ɪs ᴏɴ ᴀᴛᴛᴀᴄʜᴇᴅ ᴘʜᴏᴛᴏsᴏʀʀʏ ɪᴛ ʀᴇᴀʟʟʏ sᴀɪᴅ ɪ ʜᴀᴠᴇ ʀᴜᴅᴇ ᴡᴏʀᴅs
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✍︎✰ᴍᴀᴛʜᴅᴇᴍᴏɴǫᴜᴇᴇɴ✰
✍︎☮︎ᴄᴀʀʀʏᴏɴʟᴇᴀʀɴɪɴɢ☮︎
Related Questions
In activity-based costing, unit product costs computed for external financial reports include: Multiple Choice direct materials, direct labor, and manufacturing overhead. direct materials and direct labor. direct labor and manufacturing overhead. direct materials and manufacturing overhead.
Answers
Answer: direct materials, direct labor, and manufacturing overhead.
Explanation:
When it comes to the costs that are apportioned to a product as its cost, activity-based costing believes that this include both the direct and indirect costs of production.
The direct costs would include the materials and the labor directly involved in the product's production as well as the indirect manufacturing overhead with the logic being that even though manufacturing overheads do not directly impact the production of the good, production would not be able to happen without them.
A corporation sold 11,000 shares of its $10 par value common stock at a cash price of $14 per share. The entry to record this transaction would include:___________
Answers
Answer:
A credit to Common Stock for $110,000. A further explanation is provided below.
Explanation:
Given:
Corporation sold,
= 11,000
Common stock per value,
= $10
Cash price,
= $14 per share
The entry record would include,
= [tex]Sold \ corporation\times Common \ stock[/tex]
= [tex]11000\times 10[/tex]
= [tex]110,000[/tex] ($)
Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below:
Estimated machine-hours 72,900
Estimated variable manufacturing overhead $ 3.50 per machine-hour
Estimated total fixed manufacturing overhead 838,710
The predetermined overhead rate for the recently completed year was closest to:________.
A. $6.66 per machine-hour
B. $10.50 per machine-hour
C. $8.69 per machine-hour
D. $15.00 per machine-hour
Answers
Answer:
D. $15.00 per machine hour
Explanation:
The computation of the predetermined overhead rate for the recently completed year is seen below;
First, we will calculate the fixed overhead rate.
Fixed overhead rate = Estimated total fixed manufacturing overhead / Estimated machine - hours
Fixed overhead rate = $838,710 / 72,900
Fixed overhead rate = $11.50
Then,
Predetermined overhead rate = Fixed overhead rate + Variable overhead rate
Predetermined overhead rate = $11.50 + $3.50
Predetermined overhead rate for the recently completed year was closest to $15.00 per machine hour
Suppose Skyler invests in an annuity that pays 3.2% annual interest, compounded monthly. If she contributes $155 every month for 10 years, how much interest would she earn during that time
Answers
Answer: $3,286.47
Explanation:
Find the future value of the annuity after 10 years.
Number of periods = 10 * 12 months = 120 months
Interest = 3.2% / 12 = 3.2/12%
Future value of annuity = Annuity * ( (1 + rate)^ number of periods- 1) / rate
= 155 * ( ( 1 + 3.2%/12) ¹²⁰- 1) / 3.2%/12
= $21,886.47
The find the amount that the money would have come to without being invested:
= 155 * 120 months
= $18,600
Interest is:
= 21,886.47 - 18,600
= $3,286.47
The current price of an annual coupon bond is 100. The derivative of the price of the bond with respect to the yield to maturity is -700.The yield to maturity is an annual effective rate of 8%. Calculate the duration of the bond.
Answers
Answer:
The duration of the bond = 7.56 years
Explanation:
Given the current price = 100
DM = -1 x Current derivative price / Current price
DM = (-1 x -$700 / $100)
DM = 7
Now, D = DM (1 + r)
D = 7 (1 + 0.08)
D = 7.56
The duration of the bond = 7.56 years
Measuring GDP
The following table shows data on consumption, investments, exports, imports, and government expenditures for the United States in 2018, as published by the Bureau of Economic Analysis. All figures are in billions of dollars.
Fill in the missing cells in the table to calculate GDP using the expenditure approach
Data
(Billions of dollars)
Consumption (C) 13,948.5
Investment (I) 3,650.1
Exports (X) 2,531.3
Imports (M) 3,156.7
Net Exports of Goods and Services
Government Purchases (G) 3,520.8
Gross Domestic Product (GDP)
Answers
Answer:
$-625.4 billion
$20,494 billion
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
Net export = exports – imports
2531.3 - 3,156.7 = $-625.4 billion
GDP = 13,948.5 + 3,650.1 + 3,520.8 - $-625.4 = $20,494 billion
When a customer is venting their anger, they will be easier to deal with if you _____.
a. acknowledge their anger and let them share some of it with you
b. encourage them to continue venting
c. suggest an immediate solution to their problem
d. immediately advise management of the problem
Answers
Answer:
A resposta correta é A. reconheça a raiva deles e deixe-os compartilhar um pouco com você.
You are analyzing ABC Company, a computer manufacturer. You notice that inventory turnover this year is significantly lower than in prior years. You also notice that accounts receivable turnover is significantly lower this year when compared to previous years. Provide three explanations that would be consistent with your observation for inventory turnover and include an explanation of whether these would be of concern to you, as well as what the effect might be on the next period's financial results. In addition, provide three explanations that would be consistent with your observation of the accounts receivable turnover, and explain whether these would be of concern to you.
Answers
Answer:
ABC Company
1. Observation: Current year's inventory turnover is significantly lower than those of previous years.
Explanations:
1. Lower inventory turnover implies weaker sales for the current period than those of previous years.
2. Lower inventory turnover results from excessive inventory, which increases storage costs and interest expenses.
3. The ratio may also indicate that the demand for the product is declining rapidly. Many reasons can be adduced for this situation. Little marketing efforts, bad product, and lack of product competitiveness.
a) The formula for computing the inventory turnover equals Cost of goods sold/Average Inventory. The ratio shows the number of times goods are sold in a period. When goods are sold more frequently, sales activities increase, including revenue and profit.
2. Observation: Also current year's accounts receivable turnover is significantly lower than in previous years.
Explanations:
1. Billing inefficiency can contribute to lower accounts receivable turnover.
2. Poor credit policy may give rise to inefficient collection process, excessive bad debts, long credit days, bad customers, and lack of incentives to customers to settle their invoices.
3. Lastly, lower accounts receivable turnover may point to declining demand of the product by customers.
b) The formula for calculating the accounts receivable turnover is Net Credit Sales divided by Average receivables. The ratio determines the effectiveness of the company's credit policy.
. A new bond issue is being issued at a market price of $922 with a 11.4% interest rate and will be due in 16 years. If the firm has a 32 percent tax rate, calculate the after-tax cost of debt.
Answers
Answer:
8.53%
Explanation:
Par value = $1000
Current bond = $922
Coupon = 1000*11.4% = $114
Years = 16
Pretax cost of debt = YTM(Nper, PMT, -PV, FV)
Pretax cost of debt = YTM(16, 114, -922, 1000)
Pretax cost of debt = 0.1255
Pretax cost of debt = 12.55%
After tax cost of debt = Pretax cost of debt * (1 - Tax rate)
After tax cost of debt = 12.55% * (1 - 32%)
After tax cost of debt = 0.1255 * 0.68
After tax cost of debt = 0.08534
After tax cost of debt = 8.53%
The following general ledger accounts and additional information are taken from the records of Wolfe Corporation at the end of its fiscal year, December 31, 2019 Additional information:
a. The prepaid insurance is for a one-year policy, effective July 1, 2019.
b. A physical count indicated that $500 of supplies is still on hand.
c. $50 of December rent expense has not been recorded.
101 Unused Supplies 173 Advertising Exp. 610 Bal 700 Bal. 200 Cash Bal 2,700 Accounts Receivable110 Bal. 2,000 Common Stock Bal 320 3,800 Salaries Expense 656 Bal. 4,500 161 654 Prepaid Insurance Bal. 1,200 Repair Revenue Bal 450 7,750 Rent Expense Bal. 250
Required:
1. Record all necessary adjusting entries in general journal format including general ledger account numbers. Assume the following account numbers: Insurance Expense: 631; Supplies Expense: 668.
2. Post the adjusting entries to T-accounts and calculate balances.
3. Prepare all closing entries in general Journal format. Include general ledger account numbers.
4. Post the closing entries to the applicable general ledger accounts.
Answers
Answer:
a. Prepaid insurance (Dr.) $600
cash (Cr.) $600
b. Supplies expense (Dr.) $200
Unused supplies (Cr.) $200
c. Rent expense (Dr.) $50
Cash (Cr.) $50
Explanation:
Insurance expense : $1,200 * 6 / 12 = $600.
Cash balance $2,700 - $600 - $50 = $2,050
If you encounter a process that has limited flexibility, shorter lead times, and cheaper products, customization most likely is occuring:
Answers
Answer: late in the supply chain
Explanation:
Assemble to order refers to a strategy whereby the products ordered by customers are manufactured quickly while they are customizable to an extent
Even though the basic parts of the product are manufactured already, they're not yet assembled until an order comes in.
If a process that has limited flexibility, shorter lead times, and cheaper products, customization most likely is occuring late in the supply chain.
In a situation where a process with limited flexibility, shorter lead times, and cheaper products, customization of the product or service will most likely occur D. Late in the Supply Chain
Given the process's limited flexibility and shorter lead times, customization, which is a process that tailors a product or service to meet specific customer's or market's demands, cannot occur early, at every step of the Supply Chain, or before procurement of raw materials.
Thus, customization occurs later in the Supply Chain when the goods are about to be delivered to the customer because delivery and satisfying customers or the market are the ultimate goals of any Supply Chain management.
Learn more: https://brainly.com/question/15239226
The declaration, record, and payment dates in connection with a cash dividend of $54,000 on a corporation's common stock are October 1, November 7, and December 15.
Journalize the entries required on each date. If no entry is required, choose "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.
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Answer:
October 1
Dr Cash Dividend $54,000
Cr Dividend payable $54,000
November 7
No entry
December 15
Dr Dividend payable $54,000
Cr Cash $54,000
Explanation:
Preparation of the amount journal entries
October 1
Dr Cash $54,000
Cr Dividend payable $54,000
November 7
No entry
December 15
Dr Dividend payable $54,000
Cr Cash $54,000
A local car dealer advertised a late model full-size pickup truck which it had taken as a trade-in on a new vehicle purchase in the newspaper for $21,000.00. However, a salesman learned of a man who was seeking that particular model of truck and arranged for him to come and look at the truck the next day. In the meantime, another person, having seen the advertisement came to the dealership and offered to pay the advertised price. The salesman refused to sell the truck for $21,000.00 because he believed that the other person would pay at least $22,000.00. As explained in chapters 11 and 12, legally the dealership could do this because an advertisement is not an offer. Ads sure look like offers. Why do you think the law has the doctrine that ads are not offers
Answers
Answer:
In his article Is an ad an Offer? Why it's, and Why It Matters, Jay M. Feinman and Stephen R. Brill straightaway state that a billboard is a suggestion. The writers cite the instance of the Hornbook's law that contends that an ad isn't a suggestion. This law argues that "if goods are advertised purchasable at a particular price, it's not a suggestion, and no contract is made by the statement of an intending purchaser". The courts, generally, don't consider ads as offers.
Explanation:
Rather ads are a call for participation in business negotiations. This makes practical sense. Consider: if advertisements were offers, someone who saw a commercial for "Delicious Apples" could say: "I accept your offer to get delicious apples, and if they are not delicious, I'll sue!" nobody would be ready to conduct business or advertise products. Courts and students justify the rule on two principal grounds: a typical advertisement is just too general to be a suggestion and there no limitation on what percentage people may accept by trying to shop for it.
I think this law should be changed since it misleads people and their expectations. By seeing a billboard I'm going for purchasing the merchandise whose rate was also given, the dealer says that he has already sold to somebody else who more. during this example, the salesperson just refused to sell the truck against the advertised price of $21,000 since he had the offer of $22,000 isn't only unethical but against the business norms. Either the law should be changed in this regard or there should be a stop to such misleading advertisements.
Which is a risk in IS development?
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Answer:
Very simply, a risk is a potential problem. It's an activity or event that may compromise the success of a software development project. Risk is the possibility of suffering loss, and total risk exposure to a specific project will account for both the probability and the size of the potential loss.
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Riverbed Corp. enters into a contract with a customer to build an apartment building for $1,013,300. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $152,100 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $50,700 each week that completion is delayed. Riverbed commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes:
Completed by Probability
August 1, 2021 70%
August 8, 2021 20
August 15, 2021 5
After August 15, 2021 5
Required:
Determine the transaction price for this contract.
Answers
Answer: $1,142,585
Explanation:
The transaction price is the contract price in addition to the expected value of the performance bonuses based on its probabilities.
= Contract price + Expected value of bonus
Bonus is to reduce by $50,700 for every week so:
Expected value of bonus = (152,100 * 70%) + ( (152,700 - 50,700) * 20%) + ( (152,700 - 50,700 - 50,700) * 5%) + ( (152,700 - 50,700 - 50,700 - 50,700) * 5%)
= $129,285
Transaction price = 1,013,300 + 129,285
= $1,142,585
SureLock Manufacturing Co. makes and sells several models of locks. The cost records for the ZForce lock show that manufacturing costs total $19.62 per lock. An analysis of this amount indicates that $11.90 of the total cost has a variable cost behavior pattern, and the remainder is an allocation of fixed manufacturing overhead. The normal selling price of this model is $29.00 per lock. A chain store has offered to buy 14,000 ZForce locks from SureLock at a price of $15.75 each to sell in a market that would not compete with SureLock’s regular business. SureLock has manufacturing capacity available and could make these locks without incurring additional fixed manufacturing overhead.
Required:
a. Calculate the effect on SureLock’s operating income of accepting the order from the chain store.
b. If SureLock’s costs had not been classified by cost behavior pattern, is it likely that a correct special order analysis would have been made? Explain your answer.
c. Identify the key qualitative factors that SureLock managers should consider with respect to this special order decision.
Answers
Answer:
a. $53900
Explanation:
a. the effect on surelocks operating income
$15.75 - $11.9
= $3.85*14000 zforce locks
= $53900
the operating income has risen by 53900 dolars
b. the correct special order analysis can only come in if the the actual cost that was made on the special order was stated. If not the decison cannot be tken rightly given that the total cost and the fixed manufacturing cost is higher than that of the special order price for selling. the special order is not going to be accepted given this reason. So a correct special order analysis would not be made.
c. the key qualitative factors are
selling cost for each lock for this special order and also the variable costs.
_______________ skills, though developed through job training and work experience, are generally acquired during the course of your formal education.
a. Interpersonal
b. Technical
c. Conceptual
d. Communication
Answers
Answer:
D
Explanation:
bank holds $10 for every $100 in deposits. The bank wants to hold $9 for every $100 in deposits. The bank holds desired reserves of $7 comma 000 and actual reserves of $12 comma 000 . What is the actual reserve ratio, the desired reserve ratio, and the excess reserves ?
Answers
Answer:
Actual reserve ratio = Money that bank holds per deposit
= 10 / 100
= 10%
Desired reserve ratio = Money banks wants to hold per deposit
= 9 / 100
= 9%
Excess reserves = Actual reserves - desired reserves
= 12,000 - 7,000
= $5,000
Which of the following accurately describes the correlation between task interdependence and team performance?
a. It is weak and positive.
b. It is moderate and negative.
c. It is strong and negative.
d. It is moderate and positive.
e. It is weak and negative.
Answers
Answer: it is moderate and positive.
Explanation:
Task interdependence has to do with the degree to which there's an interaction and reliance on the team members which is vital in the accomplishment of the goals of the organization.
The correlation between task interdependence and the team performance is that it is moderate and positive. Therefore, the correct option is D.
When Maria suggests a product modification to a supplier of her company, she is performing which of these roles according to Mintzberg?
Answers
Answer: Spokesperson
Explanation:
Managers have a role to play according to Mintzberg, of being spokespeople for their companies. They are to represent the company outside and speak on its behalf in order to get it better deals and an improved image.
This is what Maria did here. By suggesting a product modification for the benefit of her company, she was being a spokesperson who was speaking up for the company so that it gets a better deal.
Henley Corporation has bonds on the market with 12 years to maturity, a YTM of 9.7 percent, a par value of $1,000, and a current price of $948. The bonds make semiannual payments. What must the coupon rate be on the bonds
Answers
Answer:
8.96%(9.0% rounded to 1 decimal place since YTM of 9.7% was also to 1 decimal place)
Explanation:
In ascertaining the coupon rate, we need to, first of all, determine the semiannual coupon payment(since the bond pays coupons on a semiannual basis) of the bond using a financial calculator bearing in mind that the calculator would be set to its default end mode before making the following inputs:
N=24(number of semiannual coupons in 12 years left to maturity=12*2=24)
I/Y=4.85(semiannual yield to maturity without the "%" sign=9.7%/2=4.85%)
PV=-948( the current bond price of $948 shown as a negative since it is an outflow of cash for the bond investor)
FV=1000(the bond face value of $1000)
CPT
PMT=$44.79
semiannual coupon=face value*coupon rate/2
$44.79=$1000*coupon rate/2
$44.79*2==$1000*coupon rate
$89.58=$1000*coupon rate
coupon rate=$89.58/$1000
coupon rate=8.96%
Suppose Baa-rated bonds currently yield 6.1%, while Aa-rated bonds yield 4.1%. Now suppose that due to an increase in the expected inflation rate, the yields on both bonds increase by 1.0%. What would happen to the confidence index? (Round your answers to 4 decimal places.)
Answers
Answer:
Confidence index increases from 0.6721 to 0.7183
Explanation:
The computation of the confidence index is shown below:
Initial Confidence Index is
= Aa-rated bonds yield ÷ Baa-rated bonds yield
= 4.1% ÷ 6.1%
= 0.6721
Since the yields on both bonds increase by 1.0%
So, the confidence index after increase in yield is
= (4.1% + 1%) ÷ (6.1% + 1%)
= 0.7183
So, Confidence index increases from 0.6721 to 0.7183
Do you think that Rise of China is inevitable or it may collapse like any other authoritarian regimes including former the Soviet Union and East European Countries?
Answers
Answer:
China will not collapse like the USSR or Eastern European countries.
They are heavily invested in Africa. They have the means to continue to produce goods. They have cheap labor that other countries continue to use.
China plans their economic goals and priorities decades in advance.
The Soviet Union was never an economic super power.
In comparing the deviations of returns, which one of the following assets has historically had the largest standard deviation of annual returns?
a. large company stocks
b. long-term corporate bonds
c. long-term government bonds
d. U.S. Treasury bills
Answers
Answer:
A
Explanation:
Anderson Corporation had a credit balance of $43,000 in its Retained Earnings account on December 31, 2018. Net income of $6,000 was reported on its income statement for the year ended December 31, 2019. Dividends in the amount of $5,625 were declared on December 31, 2019 and are payable to the company's stockholders on February 1, 2020. The balance in its Retained Earnings account on December 31, 2019 equals _____.
Answers
Answer:
$43,375
Explanation:
Calculation to determine what The balance in its Retained Earnings account on December 31, 2019 equals
Using this formula
Ending retained earnings = Beginning retained earnings + Net income - Dividend declare
Let plug in the formula
Ending retained earnings= $ 43,000 + $ 6,000 - $ 5,625
Ending retained earnings= $ 49,000 - $ 5,625
Ending retained earnings= $ 43,375
Therefore The balance in its Retained Earnings account on December 31, 2019 equals $ 43,375
Riley operates a plumbing business, and this year the three-year-old van he used in the business was destroyed in a traffic accident. The van was originally purchased for $21,000 and the adjusted basis was $5,675 at the time of the accident. Although the van was worth $6,100 at the time of accident, insurance only paid Riley $1,325 for the loss. What is the amount of Riley's casualty loss deduction
Answers
Answer:
$4,350
Explanation:
Calculation to determine the amount of Riley's casualty loss deduction
Using this formula
Casualty loss deduction=Adjusted basis - insurance reimbursement
Let plug in the formula
Casualty loss deduction=($5,675 − $1,325)
Casualty loss deduction=$4,350
Therefore the amount of Riley's casualty loss deduction is $4,350
Betty Vinson improperly capitalized line costs at her boss's direction. Which company did she work for
Answers
Answer: WorldCom
Explanation:
The WorldCom scandal of 2002 was the worst one in U.S. history and led to shareholders losing over $30 billion as a result of share prices falling drastically when it was revealed that the company had been making fraudulent accounting entries to look successful when it fact it had been losing money.
Betty Vinson was the company's Director of Corporate Reporting and her boss, CEO Bernie Ebbers, pressured her into making fraudulent entries because it was said that he "didn't want to disappoint Wall Street". This scandal was one of those that directly led to the Sarbanes-Oxley Act being passed.
what is balance of trade and balance of payment?
Answers
Answer:
the difference in value between a country's imports and exports.
is an accounting of a country's international transactions for a particular time period.
MSI has been approached by a fourth-grade teacher from Portland about the possibility of creating a specially designed game that would be customized for her classroom and environment. The teacher would like an educational game to correspond to her classroom coverage of the history of the Pacific Northwest, and the state of Oregon in particular. MSI has not sold its products directly to teachers or school systems in the past, but its Marketing Department identified that possibility during a recent meeting.
The teacher has offered to buy 1,000 copies of the CD at a price of $5 each. MSI could easily modify one of its existing educational programs about U.S. history to accommodate the request. The modifications would cost approximately $500. A summary of the information related to production of MSI’s current history program follows:
Direct materials $ 1.50
Direct labor 0.60
Variable manufacturing overhead 2.25
Fixed manufacturing overhead 2.00
Total cost per unit $ 6.35
Sales price per unit $ 12.00
Required:
1. Compute the incremental profit (or loss) from accepting the special order.
2. Should MSI accept the special order?
Yes
No
3. Suppose that the special order had been to purchase 1,000 copies of the program for $4.50 each. Compute the incremental profit (or loss) from accepting the special order under this scenario.
4. Suppose that MSI is operating at full capacity. To accept the special order, it would have to reduce production of the history program. Compute the special order price at which MSI would be indifferent between accepting or rejecting the special order. (Round your answer to 2 decimal places.)
Answers
Answer:
1. The incremental profit from accepting the special order is $150.
2. Yes, MSI should accept the special order. This is because it will increase profit by $150.
3. The incremental loss from accepting the special order is $350.
4. The special order price at which MSI would be indifferent between accepting or rejecting the special order is $12.50 per unit.
Explanation:
Note that only variable costs are relevant to making decision on a special order. That is, fixed cost is not relevant. Therefore, we have:
Total variable cost per unit = Direct materials + Direct labor + Variable manufacturing overhead = $1.50 + $0.60 + $2.25 = $4.35.
We then proceed as follows:
1. Compute the incremental profit (or loss) from accepting the special order.
Incremental profit (or loss) = ((Special order price per unit - Total variable cost per unit) * Units of special order) - Modification cost = (($5 - $4.35) * 1,000) - $500 = $150
Therefore, the incremental profit from accepting the special order is $150.
2. Should MSI accept the special order?
Yes, MSI should accept the special order. This is because it will increase profit by $150.
3. Suppose that the special order had been to purchase 1,000 copies of the program for $4.50 each. Compute the incremental profit (or loss) from accepting the special order under this scenario.
Incremental profit (or loss) = ((Special order price per unit - Total variable cost per unit) * Units of special order) - Modification cost = (($4.50 - $4.35) * 1,000) - $500 = ($350), or –$350
Therefore, the incremental loss from accepting the special order is $350.
4. Suppose that MSI is operating at full capacity. To accept the special order, it would have to reduce production of the history program. Compute the special order price at which MSI would be indifferent between accepting or rejecting the special order. (Round your answer to 2 decimal places.)
This can be calculated as follows:
Modification cost per unit = Modification cost / Units of special order = $500 / 1,000 = $0.50
Special order price = Regular price + Modification cost per unit = $12 + $0.50 = $12.50 per unit
Therefore, the special order price at which MSI would be indifferent between accepting or rejecting the special order is $12.50 per unit.
Slaughter Industries just signed a sales contract with a new customer. What is this contract worth as of the end of year 4 if the following payments will be received and the firm earns 6 percent on its savings
Answers
Answer:
$489,512.15
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
We are supposed to determine the present value
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = 84,000
Cash flow in year 2 = 113,000
Cash flow in year 3 = 125,000
Cash flow in year 4 = 130,000
I = 6%
PV = 387,739.47
387,739.47(1.06)^4 = $489,512.15
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
