Answer:
The solution shows that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%.
Explanation:
The IRR or internal rate of return is the rate at which NPV or Net Present Value of the investment becomes zero. We are provided with the initial outlay for the project and the annual cash inflows along with time period. Using the annuity factors given below, we need to find out the factor which makes the NPV zero. The NPV is calculated as follows,
NPV = Present Value of Cash Inflows - Initial Outlay
We can try out each annuity factor and see what NPV is generates.
1. 6% rate (Annuity factor = 5.582)
NPV = (30000 * 5.582) - 146040
NPV = $21420
2. 8% rate (Annuity factor = 5.206)
NPV = (30000 * 5.206) - 146040
NPV = $10140
3. 10% rate (Annuity factor = 4.868)
NPV = (30000 * 4.868) - 146040
NPV = $0
So, from the above solution we can see that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%
If people refused to use banks to create checkable deposits, the banking system would not be able to create new money.
Checkable deposits include all accounts on which checks can be drawn. These deposits allow the owner of bank account to write checks to third parties. Also, they are very liquid assets that allow depositors to have an easy access to their funds.
For these reason, checkable deposits generally are important but also one of the lowest-cost source of bank funds, covering a large share of bank liabilities. Thus, banks create money by lending excess reserves to consumers and businesses.
Hence, if people refused to use banks to create checkable deposits, the money multiplier decreases.
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Answer:
$6490
Explanation:
The computation of the ending inventory is shown below:
= (January ending inventory in units × price) + (February ending inventory in units × price) + (May ending inventory in units × price) + (September ending inventory in units × price) + (November ending inventory in units × price)
= (8 units × $113) + (9 units × $124) + (13 units × $136) + (7 units × $144) + (11 units × $154)
= $904 + $1,116 + $1,768 + $1,008 + $1,694
= $6,490
Answer:
Preparation of the journal entry that Jervis should make on June 28 to record the deposit
Dr Cash ($5,800 - $261) $ $5,539
Dr Credit card expense ($5,800 X 4.5%) $ 261
Cr Sales $5,800
(5,539+261)
Explanation:
Since Jervis assesses a 4.5% charge on sales for using its card in which On June 28, he had $5,800 in NB Card credit sales this means we have to Debit Cash with $5,539 ($5,800 - $261) and as well Debit Credit card expense with $261 ($5,800 X 4.5%) while we Credit Sales with $5,800 (5,539+261)
Answer:
16,000 shares will be outstanding.
Explanation:
Given;
Number of outstanding stocks = 12,000
par value per share = $ 1
Market price per share = $ 39
stock split = 4 for 3 i.e the stockholders will receive 4 shares if they are having 3 shares.
or by using the concept of unitary method
3 existing shares = 4 shares will be issued.
or
1 existing share = ( 4/3 ) shares will be issued.
thus,
for 12,000 existing shares = (4 / 3 ) × 12,000 shares will be issued.
or
12,000 existing shares = 16,000 shares will be issued.
hence,
16,000 shares will be outstanding.
