Gross wage refers to the wage an employee ears before deductions are subtracted. True False

Turk Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investment

Scrat [10]

Answer:

E) Only Machine B is acceptable

Explanation:

The computation is shown below;

For Machine A

Year Cash Flow PV Factor PV of Cash Flow

0 -$9,000 1 -$9,000

1 $5,000 0.8696 $4,348

2 $4,000 0.761 $3,044

3 $2,000 0.6575 $1,315

NPV -$293

Machine B

Year Cash Flow PV Factor PV of Cash Flow

0 -$9000 1 -$9,000

1 $1,000 0.8696 $869.6

2 $2,000 0.761 $1,522

3 $11,000 0.6575 $7,232.5

NPV $624.1

As we can see that from the above calculations that the npv for machine A is in negative so the same should not be accepted but for machine the npv is in positive so the same should be accepted

4 0

3 years ago

You find a zero coupon bond with a par value of $10,000 and 14 years to maturity. The yield to maturity on this bond is 5.1 perc

Lelechka [254]

Answer:

Bond Price = $4940.8468 rounded off to $4940.85

Explanation:

The price of a zero coupon bond is simply calculated by calculating the present value of the face value of the bond that the bond pays at maturity. The formula for the price of a zero coupon bond is,

Bond Price = Face Value / ( 1 + r )^n

Where,

r is the rate or YTM
n is the number of periods left to maturity

Assuming that the r or YTM is always stated in annual terms, the semi annual YTM will be 5.1% / 2 = 2.55%

Assuming semi annual compounding periods, the total number of periods or n will be,

n = 14 * 2 = 28

Bond Price = 10000 / (1 + 0.0255)^28

Bond Price = $4940.8468 rounded off to $4940.85

7 0

3 years ago

Mountain High Ice Cream Company transferred $65,000 of accounts receivable to the Prudential Bank. The transfer was made with re

Liono4ka [1.6K]

Answer:

Dr Cash 56,550

Dr Receivable from factor 5,500

Dr Loss on sale of receivables 6,450

Cr Accounts receivables 65,000

Cr Recourse liability 3,500

Explanation:

cash = ($65,000 x 90%) - factoring fees = $58,500 - $1,950 = $56,550

factoring fees = $65,000 x 3% = $1,950

loss on sale of receivables (includes factoring fees) = (accounts receivables + recourse liability) - (cash + receivable from factor) = ($65,000 + $3,500) - ($56,550 + $5,500) = $68,500 - $62,050 = $6,450

3 0

3 years ago

A corporate bond matures on October 31, 2035. Its coupon rate is 5.00% and face value is $100. Its yield is 5.90%. How much is i

zvonat [6]

Answer:

Its price on June 3, 2020 is $90.70.

Explanation:

The price of the Bond is its Present Value (PV) .

You need to determine first the number of years between June 3, 2020 and October 31, 2035. Draw a timeline to be accurate. There are 16 years and 5 months.

Next, we can calculate the price using time value of money techniques.

N = 16.4

PMT = $100 × 5.00% = $5

P/Yr = 1

FV = $100

IRR = 5.90%

PV = ?

Using a Financial calculator to input the values as above, the price of Bond on June 3, 2020 is $90.70.

6 0

3 years ago

Scenario 15-5 An airline knows that there are two types of travelers: business travelers and vacationers. For a particular fligh

taurus [48]

Answer:

Profit= $25000

Explanation:

Giving the following information:

Tere are 100 business travelers who will pay $600 for a ticket while 50 vacationers will pay $300 for a ticket. T

There are 150 seats available on the plane.

The cost to the airline of providing the flight is $20,000.

Price= $300

Profit= ($300*150) - 20000= $25000

4 0

4 years ago