Answer:
If the interest rate is 6%,then selling the investment for $2,000 is a good deal.
If the interest rate is 10%, then selling the investment for $2,000 is a bad deal.
Explanation:
If the interest rate is 6% then compounded yearly for 10 years 1,000 should have a future value of
1000*1.06^10=1,790
SO if the interest rate is 6% then in 10 years the investment should have a future value of 1,790 and selling it for $2,000 is a very good deal as you are making more than 6% per year which is the interest rate.
Now if the interest rate is 10% the future value will be
1,000*1.1^10=2593
Now the future value is more than 2,000 which means that we will be earning less than the interest rate, which means it is a bad deal.
<h2><u>Answer:</u></h2>
(see the picture attached)
Answer:
d) $38,000 Debit balance.
Explanation:
Predetermined overhead rate = Estimated Total Overhead Costs / Estimated Direct Labor Costs
= $472000 / $2,360,000
= 0.2
= 20% of direct labor costs.
Applied overheads = (20%*Actual direct labor costs)
Applied overheads = 20% * $1,980,000
Applied overheads = $396,000
So, Overhead under-applied = $434,000 - $396,000 = $38,000 (Debit)
