Answer:
The present value of the cash flows from the investment is $1015.85.
Explanation:
The present value of the cash flows can be calculated using the discounted cash flows approach also known as the DCF approach. Under this approach, the cash flows are discounted to the present day value using a certain discount rate.
The formula to calculate the present value of the cash flows is,
Present value = CF1 / (1+i) + CF2 / (1+i)^2 + ... + CFn / (1+i)^n
Where,
- CF are the cash flows
- i is the interest rate which is also the discount rate
Present value = 500 / (1+0.12) + 800 / (1+0.12)^3
Present value = $1015.85277 rounded off to $1015.85
Answer:
1. Adjustments of or changes in price are not smooth or synchronized.
2. Inflation rarely have impact on the prices of inputs.
3. The concentration of sellers is more on nominal prices of goods than real prices.
Explanation:
Inflation can be described as a sustained increase in the general price level of commodities within a country over a period of time.
The following are the reasons inflation in the real world result in shortages and surpluses:
1. Adjustmensts of or changes in price are not smooth or synchronized.
2. Inflation rarely have impact on the prices of inputs.
3. The concentration of sellers is more on nominal prices of goods than real prices.
Reliability because it shows that you are responsible to pay
Answer:
$84,250
Explanation:
The computation of the estimated inventory loss is shown below:
= Opening Inventory + Purchases - Cost of Sales
where,
Cost of sales is
= $494,000 ×100 ÷ 160
= $308,750
And, the opening inventory is $184,000
And, the purchase is $209,000
So, the estimated inventory loss is
= $184,000 + $209,000 - $308,750
= $84,250
We simply applied the above formula so that the estimated inventory loss could arrive
