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miss Akunina [59]
2 years ago
12

You want to lease a riding mower from Mowers, Inc.. The lease contract is in the form of 36 equal monthly payments at a 7.2 perc

ent stated annual rate, compounded monthly. Because the mower costs $10,000 retail, Mowers Inc. wants the present value of the lease payments to equal $10,000. Suppose your first payment is due immediately. What will your monthly lease payments be
Business
1 answer:
Valentin [98]2 years ago
4 0

Answer:

$307.83918 or $307.84

Explanation:

The computation of the monthly lease payment is shown below:

Given that

stated annual rate = s = 7.2% = 0.072

monthly rate = r = s ÷ 12 = 7.2 ÷ 12 = 0.6% = 0.006

number of equal monthly payments =  n = 36  

present value of the lease payments = p = $10,000

Based on the above information

let us assume the monthly lease payments be A

Now the following formula to be used

A × PVIFA(n,r) × (1 + r) = p

where,

PVIFA(n,r) is

= [ (1+r) n -1] ÷ ((1 + r)n × r)

= [ (1.006)36 -1] ÷ ((1.006)36  × 0.006)

= 32.29074882

Now  

A × 32.29074882 × (1.006) = $10,000

A = $10,000 ÷ (32.29074882 × 1.006)

= $307.83918 or $307.84

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2) A firm sells two products. Product R sells for $20; its variable cost is $6. Product S sells for $50; its variable cost is $3
Tom [10]

Answer:

$6896551.7

Explanation:

Given the following :

Product R:

Selling price = $20

Variable cost = $6

Product S:

Selling price = $50

Variable cost = $30

Firm's fixed cost = $4, 000,000

Break-even point dollars = (Fixed cost /Contribution margin ratio)

Contribution margin : selling price - variable cost

Product R: $(20 - 6) = $14

Contribution margin ratio = ($14/$20) * 60% = 0.42

Product S: $(50 - 30) = $20

Contribution margin ratio = ($20/$50) * 40% = 0.16

Sum of contribution margin ratio for both products = (0.42 + 0.16) = 0.58

Break-even point dollars = (Fixed cost /sum of Contribution margin ratio)

= $4,000,000/0.58

= $6896551.7

3 0
3 years ago
NetonBe makes sweaters, which traditionally involved the following steps: dyeing (i.e., into six different colors), knitting of
ArbitrLikvidat [17]

Answer:

NetonBe

The standard deviation in demand for each of these three generic sweaters is:

a) Approximately 600

Explanation:

a) Data and Calculations:

Different sweater color & size combinations in the end = 18

Normally distributed demand mean of size = 1,000

Total demand of sizes = 18,000

Standard deviation of each size = 100

Standard deviation = 10% of mean (100/1,000 * 100)

Standard deviation for the total sizes = 1,800 (18,000 * 10%)

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Total demand for the three new sizes = 18,000 (6,000 * 3)

Therefore, the standard deviation in demand for each of these three generic sweaters will be = 600 (6,000 * 10%)

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