Answer:
d) the money supply should grow at a constant rate.
Explanation:
The Federal Reserve System (popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by the U.S Congress on the 23rd of December, 1913. The Fed began operations in 1914 and just like all central banks, the Federal Reserve is a United States government agency.
Generally, the Fed controls the issuance of currency in United States of America: it promotes public goals such as economic growth, low inflation, and the smooth operation of financial markets.
Monetary growth rule is a theory that was proposed by Friedman and it states that the Federal Reserve System (Fed) should be required to set or target the money supply growth rate to be equal to the growth rate of Real gross domestic product (GDP) each year and leaving the price level of goods and services unchanged.
Basically, this growth rate of gross domestic product (GDP) is usually set between 1% and 4%. Also, the monetary growth rule is also referred to as the K-Percent rule.
Hence, a monetary growth rule means that the money supply should grow at a constant rate.
Using the straight-line method, the company should report annual depreciation for the equipment of $4,200.
Given,
A company buys equipment for $48,000 expects to use it for ten years, and then sell it for $6,000
The formula to calculate annual depreciation is given below-
Annual depreciation = (Original cost - salvage value) / Estimated life(years)
Annual depreciation = ($48,000 - $6,000) / 10
Thus, annual depreciation = $4,200
A standard yearly rate at which depreciation is charged to a fixed asset is called annual depreciation. Thus, to calculated depreciation the straight-line method is used. Where you need to subtract the asset's salvage value from its cost.
To learn more about annual depreciation here:
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Answer:
2.21%
Explanation:
The internal rate of return is the rate of return on the project where the present value of future cash flows equals the initial investment outlay. It is known as the break-even discount rate since, at IRR, the net present value is zero.
The IRR can be determined using the excel IRR function as shown thus:
=IRR(values)
values are the cash flows from years 0-4
Find attached excel file for IRR computation
Answer:
May 1
Dr Cash408,000
Cr Bonds Payable 400,000
Cr Interest Expense 8,000
July 1
Dr Interest Expense 12,000
Cr Cash 12,000
Dec 31
Dr Interest Expense 12,000
Cr Interest Payable12,000
Explanation:
May 1,
Dr Cash408,000
Cr Bonds Payable 400,000
Cr Interest Expense 8,000(Accrued Interest = 400,000 x 6% x 4/12)
July 1
Dr Interest Expense 12,000
Cr Cash 12,000(Bond interest expense = 400,000 x 6% x 6/12)
Dec 31
Dr Interest Expense 12,000
Cr Interest Payable12,000
