Amortizing a loan P over n periods at i% interest / period, the payment per period is given by:
In given situation,
P=20000
period=month
i=10%/12
n=5*12=60 months
A. monthly payment amount
to the nearest cent
B. EAR (effective annual rate)
the APR is 10%, but compounded monthly.
So
EAR=(1+i/12)^12-1
=(1+0.1/12)^12-1
=0.104713
=10.4713% (effective annual rate)
Answer:
C) Debit Cash $2,750
Credit Accounts Receivable $2,750
Explanation:
When payment is received in respect of services rendered or goods sold in the past periods, the accounting rule is to debit cash or bank as the case may be and credit account receivable for the amount received. This is necessary because in period when transaction took place, revenue has been credited and account receivable debited.
A. is required to draw up a petition listing all assets and liabilities.
When marginal revenue is equal to the marginal cost, then the firm should increase the level of production to maximize its profit.
Marginal revenue simply means the increase in revenue that a company makes as a result of selling an additional output of good. Marginal cost is the cost that a company incurs for production of one extra unit of good.
It should be noted that when the marginal cost if a firm is more than the marginal revenue, it means that the firm is producing too much.
When the marginal revenue of the firm equals the marginal cost, then the firm should maximize its profit.
The correct option is A.
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Answer:
1. Operating plan.
2. Operating plan.
3. Financial plan.
4. Dividend policy.
5. B and C.
Explanation:
1. Operating plan: provides detailed implementation guidance for a firm's operations, as well as a forecast of the company's expected future free cash flows.
2. Operating plan: provides the inputs necessary for a risk management evaluation using sensitivity analysis, scenario analysis, or simulations.
3. Financial plan: Is based on knowledge of the amount of funds necessary to compensate the firm's shareholders, and the mix of debt and equity capital used to finance the firm.
4. Dividend policy: sets forth specific targets for cash or share distributions to the firm's shareholders.
Capital structure: describes specific targets for the mix of debt and equity used to finance a firm.
Financial planning can be defined as the process of estimating the amount of capital required for the smooth operations of the business and determine how to achieve the firm's set goals and objectives.
Hence, the following statements are true about financial planning;
I. Once a firm's forecasted financial statements are prepared, the firm must determine how much capital it will need to support these plans.
II. Management must monitor operations after implementing a financial plan to detect deviations from the plan and adjust accordingly.
