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brilliants [131]
3 years ago
10

On December 1, 20X1, Money Co. gave Home Co. a $200,000, 11% loan. Money paid proceeds of $194,000 after the deduction of a $6,0

00 nonrefundable loan origination fee. Principal and interest are due in 60 monthly installments of $4,310, beginning January 1, 20X2. The repayments yield an effective interest rate of 11% at a present value of $200,000 and 12.4% at a present value of $194,000. What amount of income from this loan should Money report in its 20X1 income statement?A. $0B. $1,833C. $2,005D. $7,833
Business
1 answer:
zysi [14]3 years ago
3 0

Answer: <em>(C.) $2,005</em>

Explanation:

Given :

Money Co. made a cash outflow of $194,000 for the $200,000 loan Money gave to Home Co.  

The book value of the loan is $194,000.

The stated rate is 11%.

Hence they will receive an effective interest rate of 12.4% on cash outflow.  

∴

Income from the loan = Book value × Effective interest rate × No. of months of the year

= $194,000 × 0.124 × \frac{1}{2}

= $2,004.67

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Donavan spent the day talking with a packaging company in Guam, a lighting specialist in Japan, a touchpad expert in the U.S., a
leva [86]

Answer:

C, distributed product development

Explanation:

Distributed product development can simply be defined as the distribution of the different parts/components of a product to different firms. Distributed product development is usually done when the best of partners are being consulted over a product. Te other firms usually are the best in the production of the components of the product and as such might not be based in the home country of the product's parent company.

From the above question, it is seen that Donavan is speaking to different companies all of the world as regards his product's components. The companies are the best in what they do and he has to have each of them contribute their best ideas to his product.

Cheers.

8 0
3 years ago
Jim's Hardware is adding a new product to its sales lineup. Initially, the firm will stock $36,000 of the new inventory, which w
mr_godi [17]

Answer:

$13,000

Explanation:

Given that

The stock of the firm = $36,000

Invested amount in account receivable = $13,000

Invested amount in equipment = $11,000

So by considering the above information, the amount included in the initial project for net working capital is the account receivable i.e current assets minus current liabilities and the account receivable is come under the current assets so the same is to be included

7 0
3 years ago
Miser Materials paid $27,500 in dividends and $28,311 in interest over the past year while net working capital increased from $1
Maksim231197 [3]

Answer:

Cash flow from assets = $51,800

Explanation:

Cash flow from assets = Cash flow to Creditors + Cash flow to Shareholders

Cash flow to creditors = Interest Paid – (New loans taken – Paid Loans)

                                     = $28,311 - ($0 - $21,000)

                                     = $28,311 + $21,000

                                      = $49,311

Cash flow to shareholders = Dividends paid – Net new equity

                                            = $27,500 – $25,000

                                            = $2,500

Cash flow from assets = $49,311 + $2,500 = $51,811

6 0
3 years ago
A vacant lot acquired for $115,000 is sold for $298,000 in cash. What is the effect of the sale on the total amount of the
Artemon [7]

Answer:

+$183,000

$0

+$183,000

Explanation:

Total assets increased by ($298,000 - $115,000) $183,000.

Total liabilities has no change

Total shareholder equity increased by ($298,000 - $115,000) $183,000.

4 0
3 years ago
Troy will receive $7,500 at the end of Year 2. At the end of the following two years, he will receive $9,000 and $12,500, respec
Pepsi [2]

Answer:

$33,445.44

Explanation:

The future value of an investment is its worth at a future date if the investment is done at a specific interest rate compounded yearly for certain number of years

It is computed as follows:

FV = PV (1+r)^n

FV = Future Value, PV = present value, r- interest rate, n- number of years

<em>Future value of $7500 after 3 years:</em>

FV = 7500× (1.08)^3 = 9,447.84

<em>Future Value of $9000 after 2 years:</em>

FV = 9000 × (1.08^2) = $10,497.6

<em>Future value of $12,500 after 1 year:</em>

FV = 12500× 1.08 = $13,500

The future value of these cashflows at the end of year 5

= 9,447.8 + 10,497.6 + 13,500

= $33,445.44

7 0
3 years ago
Read 2 more answers
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