Answer:
$7.77
Explanation:
The answer would be the difference between compound and simple interest
Simple interest = principal x time x interest
$1,410 x 0.03 x 4 = $169.20
Compound interest = future value - present value
future value = Principal ( 1 + interest)^n
$1,410 ( 1.03)^4 = $1586.96
$1586.96 -$1,410 = $176.97
Difference = $176.97 - $169.20 = $7.77
Answer:
The answer is D.
Explanation:
To increase asset and expense, you debit while credit decreases it.
To increase, liabity, revenue(income), equity, you credit while debit decreases it.
An insurance that has been prepaid is an asset because the benefit has not been fully utilised.
Samson and Sons has paid for an insurance that will expire December at the beginning of July.
$1,200 for 6 months.
Samson and Sons needs to recognize this as the service is being enjoyed monthly.
Therefore, insurance expense every month will increase by $1,200/6
$200
Remember that expense increase by debit and asset(Prepaid Insurance) decrease by credit.
So we have:
Debit insurance expense $200; Credit prepaid insurance $200
Answer:
4.2 years
Explanation:
Here is the complete question
Project A requires a $ 385,000 initial investment for new machinery with a five year life and a salvage value of $44,000. The company uses straight - line depreciation . Project A is expected to yield annual net income of $ 23,100 per year for the next five years.
Required:
Compute Project A's payback period.
Payback = amount invested / cash flow
cash flow = net income + depreciation
depreciation = (cost of asset - salvage value) / useful life
(385,000 - 44,000) / 5 = 68,200
Cash flow = 68,200 + $ 23,100 = 91300
$ 385,000 / 91300 =4.2
