Answer:
D. none of these answer choices are correct.
Explanation:
The principle of revenue recognition occurs when the revenue is realized or earned either cash is received or not and it also serves the accounting accrual basis. Realizable also means that the buyer gets the product but the payment is made afterward.
In this, it does not depend on cash transactions.
Hence, the option D is correct
Answer:
Project Kansas City
Explanation:
Payback period: It reflects the period at which the investor recovered their invested money. It always shows in years.
IRR: It refers to the internal rate of return. It shows an interest rate at which the Net present value is zero or the initial investment and the present value of all years cash flow would be equal
In the question, it is mentioned that Project Kansas city has a payback period of 27 months and IRR is 6% whereas the project Spokane has a payback period of 25 months and IRR is 5%.
So if we compare both the projects based on IRR, the project Kansas city has higher IRR which means it produces a higher return in the near future.
Answer:
Present value (PV) =$30,000
Number of years (n) = 3 years
Interest rate (r) = 10% = 0.10
Annual payment (A) = ?
PV = A<u>(1 - (1 + r)-n</u>)
r
$30,000 = A<u>(1 - (1 + 0.10)-3)</u>
0.10
$30,000 = A<u>(1 - (1.10)-3)
</u>
0.10
$30,000 = A(2.486851991)
A = <u>$30,000
</u>
2.486851991
A = $12,063
The amount of annual payment that the company must make is $12,063.
Explanation:
In this case, we will apply the formula for present value of an ordinary annuity. The present value, interest rate and number of years have been given with the exception of the annual payment. Thus, the annuity payment is made the subject of the formula.
Answer:
1. $47,255
2. Dr Cost of goods sold account $1,316
Cr Inventory account $1,316
Explanation:
Please find attached detailed solution to the above questions and answers.
Answer:
2) $14 billion, but by $16 billion if the securities are purchased directly from commercial banks.
Explanation:
When the FED purchases securities, it is increasing the money supply.
The total potential increase in the money supply (when securities are purchased from commercial banks) is calculated by multiplying the amount of money injected into the economy times the money multiplier:
money multiplier = 1 / r = 1 / 25% = 4
$4 billion x 4 = $16 billion
If the securities are not purchased from commercial banks, the increase in the money supply will be smaller since the public will always hold a certain amount of money.