Answer:
Explanation:
Present value of Annuity will be used for this as the future payments are given after equal intervals.
PV of an Annuity = C x [ (1 – (1+i)^-n) / i ]
Where,
C is the cash flow per period
i is the rate of interest
n is the frequency of payments
add given Values in the formula:
$1,000 x [ (1 – (1+4%)^-12) / 0.04 ]= $9387.5 is the Answer
Answer: B) balances of the partners' capital accounts.
Explanation:
Final cash distributions should be made proportionally to partners based on what they have in their Capital Accounts.
The balance in the Capital accounts of Partners shows the level of contribution that each partner has made to the business as well as their ownership proportion. When cash is to be distributed finally, it should therefore be based on the proportion of these Capital account balances to reflect the contribution and ownership.
Answer:
A, to provide a hedge against inflation
Explanation:
An inventory is the goods or materials or items held by a company for sale at a future period. An inventory could also be called stock.
Inventory has its uses among which is to provide a hedge for inflation. Inventory helps to provide an hedge against inflation as it can be used to keep good or material or ites for sale at a later date in the situation of price rise.
Simply put, Inventory helps to hold out goods, items, materials till a period when it can be resold at a higher price.
Note that, the goods to be kept for future resale is always bought a a lower price today.
Cheers.
Answer:
a. Overstates Inflation.
In the case of Mary and Bob, the CPI would have already increased but in this case the price of the minivan increased as well. This will overstate inflation because it will not measure the general rise in price alone (inflation), it will also measure the rise in price as a result of the new minivan having better features.
b. Understated Inflation
Donna's case represents an understated inflation because the quantity shrank yet the price stayed the same. This means that the price is now buying less quantity than it used to which is inflation because more dollars are now required to buy the previous amount. This was not however recorded as there was no change in price.
c. Overstates Inflation
In the case of Zach, the inflation will be overstated because Zach is no longer buying bagels and is now buying muffins so continuing to use bagels as a representative good in the basket of goods used to calculate CPI would be overstating it.
d. Accurate representation of Inflation
In Chris's case, the increase in the price of the same shoe over the years has been because of a general rise in prices and not because it is a different model. It is the same shoe and its price is rising generally so this is an accurate depiction of inflation.
Answer: Return on sales is calculated based on sales volume and not profit
Explanation:
This can be explained by understanding the scenario; the price that discounters pay is lower than any other channel. Discounters have high variable cost, they only pay $52 for the Russel with 41percent return on sales. They also larger fixed costs than the other channels and the return on sales is calculated based on sales volume and not profit.
