Answer:
1. Payback period = 2.8 years
2. Break-even time = 3.8 years
3. NPV = $12,577
Explanation:
NOTE: See the attached excel file for the calculation tables.
1. Determine the payback period for this investment.
Payback period = 2 years and [(49,600 / 70,800) * 12] months = 2 years and 8 months approximately = 2.8 years.
2. Determine the break-even time for this investment.
Break-even time = 3 years and [(23,622 / 36,199) * 12] months = 3 years and 8 months approximately = 3.8 years
3. Determine the net present value for this investment.
Net present value (NPV) of this investment is $12,577
Adjusting entry on December 31 with a debit to Interest receivable and credit to Interest Revenue for the interest generated in December.
<h3>
What is an Adjusting entry?</h3>
- Adjusting entries and journal entries used in accounting and accounting to assign income and expenditure to the period in which they actually occurred.
- They are often made at the end of an accounting period. Under accrual-basis accounting, the revenue recognition principle serves as the foundation for adjusting entries related to unearned and accrued revenues.
- Because they are done on balance day, they are occasionally referred to as balance day adjustments.
- Revenues and related costs are recorded in the same accounting period according to the matching concept of accrual accounting.
- The actual money, however, can be received or paid at a separate period.
<h3>What is Interest receivable?</h3>
- The amount of interest that has been earned but has not yet been paid out in cash is known as interest receivable.
- Many organizations won't record this number because they believe it to be irrelevant.
Therefore, it will record an Adjusting entry on December 31 with a debit to Interest receivable and credit to Interest Revenue for the interest generated in December.
Know more about Interest receivables here:
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Answer:
FV= $159,840.60
Explanation:
Giving the following information:
Initial investment= $1,000
Number of years= 2016 - 1912= 104
Interest rate= 5%
<u>To calculate the value of the investment today, we need to use the following formula:</u>
FV= PV*(1+i)^n
FV= 1,000*(1.05^104)
FV= $159,840.60
Answer:
Purchases= $330,000
Explanation:
Giving the following information:
Sales:
August $540,000
September $580,000
Abet's cost of goods sold is 60% of sales dollars.
Abet wants a merchandise inventory balance equal to 25% of the following month's expected cost of goods sold.
<u>To calculate the purchases for August, we need to use the following formula:</u>
Purchases= sales + desired ending inventory - beginning inventory
Purchases= (540,000*0.6) + (580,000*0.6)*0.25 - (540,000*0.6)*0.25
Purchases= 324,000 + 87,000 - 81,000
Purchases= $330,000
Answer: Trade obstacle
Explanation:
From the information given, we can infer that the demands are examples of trade obstacle.
Trade obstacles refers to the barriers which hinder a trade or the restrictions on an international trade. Trade obstacles can be tariffs or other non-tariff methods. Trade obstacles lead to difficulties in the sale of a product to other countries.
