Answer:
1. $2,400
2. Investment 2
Explanation:
For computing the expected return for the investment 2, we have to apply the formula which is shown below:
= Probability for Scenario 1 × return in Scenario 1 + Probability for Scenario 2 × return in Scenario 2 + Probability for Scenario 3 × return in Scenario 3
= 0.2 × $6,000 + 0.3 × $4,000 + 0.5 × 0
= $1,200 + $1,200
= $2,400
From the calculations we use the investment 2 as Paul is uncertain about the return for investment 1
Answer:
B. U.S. real GDP will fall
Explanation:
United States´s real Gross Domestic Product ( <em>GDP</em> ) will fall, because having American consumers preferring foreign goods instead of locally produced articles, the expected consequence is a reduction in the volume of local manufacturing. This fall will affect negatively the GDP index, as domestic production decreases.
Answer:
Total FV= $29,335.25
Explanation:
<u>First, we need to calculate the future value of the initial investment ($2,500) using the following formula:</u>
FV= PV*(1 + i)^n
PV= $2,500
i= 0.0075
n=10*12= 120 months
FV= 2,500*(1.0075^120)
FV= $6,128.39
<u>Now, the future value of the $1,500 annual deposit:</u>
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
We need to determine the effective annual rate:
Effective annual rate= (1.0075^12) - 1= 0.0938
FV= {1,500*[(1.0938^10) - 1]} / 0.0938
FV= $23,206.86
Total FV= $29,335.25
Answer and Explanation:
The adjusting journal entries are as follows:
On Dec 31
Amortization expense $22,150 ($110,750 ÷ 5 years)
To Copyrights $22,150
(Being amortization expense is recorded)
Here amortization expense is debited as it increased the expenses and credited the copyrights as it decreased the assets
On Dec 31
Amortization expense $19,250 ($38,600 ÷ 6 years × 10 ÷ 12)
To Patents $19,250
(Being amortization expense is recorded)
Here amortization expense is debited as it increased the expenses and credited the patents as it decreased the assets
On Dec 31
No journal entry is required
As in banks, probably Credit Unions
