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lidiya [134]
3 years ago
13

Sheldon just joined a new gym and signed up for a one-year membership. Membership fees can be paid in 12 monthly payments of $60

, due at the beginning of each month or in one payment today. If the appropriate interest rate is 10%, how much should he pay today for the annual membership
Business
1 answer:
mestny [16]3 years ago
4 0

Answer: $688.17

Explanation:

He has to pay $60 every month on the first day or a lump sum.

The lump sum will be the present value of monthly payments.

This is a stable Cashflow and so is an Annuity and because it is done on the first day of the month it is an Annuity due.

Calculating present value of annuity due is;

= Annuity + Annuity (( 1 - ( 1 + r) ^ -(n - 1)) / r)

= 60 + 60 (( 1 - ( 1 + 0.833%)-¹¹) / 0.833%) )

=60 + 60* 10.4695

= $688.17

Note: interest rate must be divided into 12 to make it monthly rate.

=10%/12

= 0.833%

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A company with a high ratio of fixed costs:
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Answer:

The correct answer is: more likely to experience a loss when sales are down than a company with mostly variable costs.

Explanation:

The fixed cost ratio is a simple ratio that divides fixed costs by net sales.

The profit formula is:

Profit = Sales- Total cost =(Price * Q)-(FC + VC*Q)

Where  

FC=Fixed cost

VC= variable cos t

Q=produce quantity

If sales go down,  we have to pay this fixed cost even if we have no sales.  So if this Fixed cost are high ,  is most likely we are going to experience loss

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3 years ago
Pharoah Corporation had the following activities in 2020. 1. Payment of accounts payable $843,000 4. Collection of note receivab
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Answer:

The amount Pharoah should report as net cash provided (used) by financing activities in its 2020 statement of cash flows is $344,000.

Explanation:

Pharoah Corporation

Statement of cash flows (extract)

Proceeds from common stock                $256,000

Proceed from bond payable                    $466,000

Dividend paid                                           ($333,000)

Purchase of treasury stock                        ($45,000)

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Note that the payment of accounts payable and collection of notes receivable only affect the operating activities section of the cash flows.

7 0
3 years ago
A price total of $1,500 is subject to a 5% sales tax. What is the amount due after tax? A. $1,625 B. $75 C. $1,750 D. $1,575
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A firm agreed to pay its workers ​$2525 an hour in 2016 and ​$4141 an hour in 2017. The price level for these years was 241 in 2
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(a) 10.4%; 16.73%

(b) 6.33%

Explanation:

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Wages paid to the workers in 2016 = $25 per hour

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Price level in 2017 = 245

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Real wage rate in 2017:

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