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3 years ago

All else constant, explain why the present value decreases as the discount rate increases.

1 answer:

6 0

<span>A rise in the discount rate cuts the present value factor and the present value. This is for the reason that a higher interest rate means you would have to set a smaller amount aside today to earn a specified amount in the future. A decrease in the time period increases the present value factor and increases the present value. In other words, when you earn more interest, you can capitalize less money today to have the same amount at a given point in the future.</span>

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Brooks Corporation has a Food Services department that provides food for employees in all other departments of the company. For

blsea [12.9K]

Answer:

the amount that should be charged for the other department is $60,000

Explanation:

The computation of the amount that should be charged for the other department is shown below:

= Variable cost per meal × number of meals

= $4 × 15,000 meals

= $60,000

hence, the amount that should be charged for the other department is $60,000

So the same would be relevant

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3 years ago

Change from the fair value method to the equity method Assume an investor company acquires for $256,000 an 8% investment in the

matrenka [14]

Answer:

Date Account title and explanation Debit Credit

March 1 Equity investment $32,000

($612,000/17%)*8% - $256,000)

Unrealized holding gain $32,000

(To adjust the value of equity investment)

Note: On 1 march, value of the investment value is increased which is unrealized based on 31 December fair value

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3 years ago

At the beginning of Year 1, Trey Inc., purchased a machine with a total acquisition cost of $33,000. The machine has an estimate

soldier1979 [14.2K]

Answer:

$8,000

Explanation:

Data provided in the question:

cost of machine = $33,000

Estimated residual value = $3,000

Estimated useful life = 3 years

Estimated useful life in terms of production = 60,000 units

Total units produced in year 1 = 16,000

Now,

Rate of annual depreciation with respect to units produced

= [ Cost - Salvage value ] ÷ Estimated useful life in terms of production

= [ $33,000 - $3,000 ] ÷ 60,000

= $0.5 per unit

Therefore,

Depreciation expense for the year 1

= Rate of annual depreciation × Total units produced in year 1

= $0.5 per unit × 16,000 units.

= $8,000

7 0

3 years ago

What percentage profit is made on a sale if the selling price is $225,000 and the purchase price is $190,000?

IgorLugansk [536]

The percentage profit = 18%

A profit is made on sale with selling price more than the purchasing price. The purchasing price is also known as the cost price.

Given the selling price = $225000

and the purchasing price = $190000

Since the selling price is more than the purchasing price, there is obviously a profit gained.

Now profit amount = Selling price - Purchasing price

= 225000-190000 = $35000

Profit percentage = (Profit / Purchasing price) x 100%

= (35000 / 190000) x 100%

= 18.42%

Learn more about profit at brainly.com/question/19104371

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5 0

2 years ago

According to the factor price equalization theorem, if country B is labor abundant, then if country B initiates trade with count

yKpoI14uk [10]

Answer:

wages should rise and rents should fall in A

Explanation:

The Factor Price Equalisation Theory states that when two countries trade, the price of identical factors of production will tend to be equalised across the countries. Factors of production include wage rate and rent of capital.

So if a country that is labour abundant trades with another country A there will be tendency for exportation of the excess labour of country B to country A.

As a result country A will become more labour intensive and wages of workers will rise since focus is more on use of labour.

However since less capital will now be used the money spent on renting capital will reduce.

6 0

3 years ago