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3 years ago

Von hayek's kayaks can borrow $12,500 for 60 days at a cost of $220 interest. what is the effective rate of interest?

1 answer:

6 0

<span>The principal amount is $12,500. From the above statement the interest for two months is $220. And the annual interest is 1320. This is 10.56% of the principal amount. So the rate of interest in 10.56</span>

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On January 1, 2021, the Excel Delivery Company purchased a delivery van for $46,000. At the end of its five-year service life, i

marusya05 [52]

Answer:

Given

Cost $46000

Life= 5 years

Salvage Value= $ 4000

Total miles = 165,000

Formula

Depreciation Straight Line Method= Cost - Salvage Value/ Useful Life

Straight Line Rate= 100%/ useful Life= 100%/5 = 20%

Double Declining Method = 2 * Straight Line Rate

Double Declining Method = 2 * Straight Line Rate= 2*20%= 40%

1. Depreciation Straight Line Method= Cost - Salvage Value/ Useful Life

Depreciation Straight Line Method= $ 46000- $4000/ 5= $ 8,400

The depreciation expense using the straight line method does not change unless the salvage value is reached

Years Depreciation Accumulated Dep Book Value

(Cost - Accu. Dep)

a. 2021 $ 8,4000 8400 37600

b. 2022 $ 8,4000 16,800 29,200

c. 2023 $ 8,4000 25200 20,800

d. 2024 $ 8,4000 33,600 12,400

e. 2025 $ 8,4000 42000 4000

2. Straight Line Rate= 100%/ useful Life= 100%/5 = 20%

Double Declining Method = 2 * Straight Line Rate

Double Declining Method = 2 * Straight Line Rate= 2*20%= 40%

In double declining method the rate is multiplied to the cost to get the depreciation expense. 40 % of $ 46000= $ 18400

Each year the rate is multiplied with the remaining book value after deducting the depreciation expense from the cost as $ 46000- $ 18400= $ 27600

Next years depreciation will be $ 27600 * 40%= $ 11040.

This will be added in the original depreciation expense $ 18400 + $ 11040 = $ 29440 and deducted from cost to get the book value. $ 46,000- $ 29440 = $ 16560.

Again rate will be multiplied and each years depreciation will be calculated similarly.

It has been summarized in the table below.

Years Dep Rate Dep Expense Accu. Dep. Book Value

a. 2021 40% 18400 18400 27600

b. 2022 40% 11040 29440 16560

c. 2023 40% 6624 36064 9936

d. 2024 40% 3974.4 40,038.4 5961.6

e. 2025 40% 2384.64 42,0423.4 3576.96

3. Depreciation per unit= (Cost -Salvage value) / Total units of production* Units of Production

Years Mileage Depreciation Depreciation

a. 2021 35,000 ($ 42000/165000)*35000 8909.09

b. 2022 37,000 ($ 42000/165000)*37000 9418.18

c. 2023 28,000 ($ 42000/165000)*28000 7127.27

d. 2024 33,000 ($ 42000/165000)*33000 8400

e. 2025 34,000 ($ 42000/165000)*34000 8654.54

7 0

4 years ago

Dividends in arrears are dividends on A. cumulative preferred stock that have been declared but have not been paid. B. non-cumul

Romashka [77]

Answer:

The correct answer is letter "A": cumulative preferred stock that have been declared but have not been paid.

Explanation:

Dividends in arrears are dividends that have not been paid in a period on cumulative preferred stock. A company does not necessarily have to pay dividends to its shareholders but the payment becomes cumulative. Under this situation, it is said that the organization has failed to generate enough cash during the year. Besides, there must be a dividend declaration for the dividends in arrears to be liable recognized.

7 0

3 years ago

Which of the following organizations emerged from the Bretton Woods agreement of 1944, where a group of international leaders de

Fofino [41]

Answer:

International Monetary Fund, IMF and the World Bank

Explanation:

The Bretton Woods Agreement was negotiated in July, 1944 which established a new global monetary system. It made US dollar the global currency and replaced gold standard.

This agreement created The World Bank and International Monetary Fund (IMF) which would monitor the new monetary system.

The Bretton Wood system was dissolved in 1970's but IMF and The World Bank still exist and are strong pillars of global monetary system.

8 0

4 years ago

The Law of Demand states that:

Rufina [12.5K]

Answer:

Explanation:

hope it helps to your question

5 0

3 years ago

Read 2 more answers

Lithium, Inc. is considering two mutually exclusive projects, A and B. Project A costs $95,000 and is expected to generate $

Flauer [41]

Answer: The internal rate of return for project A is $26,074.38

Explanation:

Using the formula

R1/(1+K)^1 R2/(1+K)^2+ - - - Rn/(1+K)^n -

C =0

Where C = capital outlay, K=Rate of interest, R=Net cash flow

Given that K=10%, (10/100)=0.1 R1=$65,000, R2=$75,000 C =$95,000

Project A

65,000/(1+0.1)^1 + 75,000/(1+0.1)^2 - 95,000

65,000/(1.1)^1 +75,000/(1.1)^2 - 95,000

59090.91 + 61983.47 - 95,000

121074.38 - 95000

= $26,074.38

Project B

R1=$64,000, R2=$67,000,R3=$56,000, R4=$45,000 C =$120,000

64,000/(1+0.1)^1+ 67,000/(1+0.1)^2+ 56,000/(1+0.1)^3 + 45,000/(1+0.1)^4 - 120,000

64,000/(1.1)^1 + 67,000/(1.1)^2 + 56,000/(1.1)^3 + 45,000/(1.1)^4 - 120,000

58181.82 + 55371.90 + 42073.63 + 30735.61 - 120,000

= 186362.96 - 120,000

= $66,362.96

4 0

3 years ago