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Suppose an economy has historically grown at a rate of 1.25%. economic activity decreased every quarter over the past year, but the decline stopped this quarter. the economy is expected to grow at a rate of 1.4% in the near future, but monetary authorities are concerned that inflation may increase. this economy is probably in the _____ stage of the business cycle.
Answer:
The cost of the truck that should be recorded at the time of purchase is $46,639
Paying installment is the best option
Explanation:
In order to Calculate the cost of the truck that should be recorded at the time of purchase we need find out present value of future amount of 60,400 with the following formula:
PV=FV/(1+i)^n
FV = Future value
i = interest rate
n = No of years
By applying the formula = 60,400/(1+.09)^3
PV= $46,639
Therefore, $46,639 should be recorded as a cost of truck.
Paying installment is better option than paying lump sum amount of $28,400 as present value of installment method ($26,322 as per below table) is less than immediate payment amount.
PV of installment method
Year installment method PV Factor PV
1 10,400 0.917 9,537
2 10,400 0.842 8,757
3 10,400 0.772 8,029
Total 26,322
If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect its bottom line <u>d.Net income will be overstated.</u>
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Explanation:
The Formula for net income is total expense subtracted by total revenues.<u>The total expense can be further sub categorized into cost of goods sold, operating expenses, interest, and taxes.</u>
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To calculate the net income, the cost of goods sold is subtracted from the revenue. In case the cost of goods sold is very low compared to what it actually should be , it makes the net income appear larger than it actually is. it results in an increases in the tax liability for the company.
hence we can say that ,If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect its bottom line <u>d.Net income will be overstated.</u>
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Answer:
The cash-flow statement is one of the most important documents for making management decisions. While the company can look profitable based on standard accounting methods, the cash-flow statement tells managers whether the company has the cash to pay its bills over the short-term.
Answer:
$29
Explanation:
The computation of the more profit or loss via processing one batch of sugar to the end products is shown below:
= Total sale in the case when it is processed further - processing cost
where,
Total sale in the case when it is processed further is
= $86 + $134
= $220
And, the processing cost is
= $91 + $17 + $38 + $45
= $191
So, the profit is
= $220 - $191
= $29
