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melomori [17]
3 years ago
12

An investor originally paid $22,000 for a vacant lot twelve years ago. If the investor is able to sell the lot today for $62,000

, what would his annual rate of return be on this investment (rounded to the nearest percent)?
a.7%
b.9%
c.5%
d.11%
Business
1 answer:
MArishka [77]3 years ago
4 0

Answer:

b.9%

Explanation:

Formula for annual rate of return formula is as follows;

Annual rate of return = [ (New value/ Initial value)^(1/t) ] -1

t = the total holding period of investment = 12 years

Old value = 22,000

New value = 62,000

Next, plug in the numbers to the formula;

Annual rate of return; r = [ (62,000/22,000) ^(1/12) ] -1

r = [2.8182 ^(1/12)] - 1

r = 1.0902 -1

r = 0.0902 or 9%

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Answer:

Explanation:

Canton Trade Mart has recently had lackluster sales. The rate of inventory turnover has​ dropped, and the merchandise is gathering dust. At the same​ time, competition has forced Canton​'s suppliers to lower the prices that Canton will pay when it replaces its inventory. It is now December​ 31, 2018​, and the net realizable value of Canton​'s ending inventory is $ 50,000 below what the company actually paid for the​ goods, which was $270,000. Before any adjustments at the end of the​ period, the Cost of Goods Sold account has a balance of $760,000.

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b. Give any journal entry required.

JOURNAL ENTRY

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Cr. Inventory...................................................................................$220,000

Being inventory write down of closing inventory to net realizable value at year end.

c. At what amount should the company report Inventory on the balance​ sheet?

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Answer:

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