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tensa zangetsu [6.8K]
2 years ago
8

you are billed $300 at 5% simple interest for 2 years but given an opportunity to pay only 3% compound interest for 2 years. Whi

ch is better and why?
Business
1 answer:
balandron [24]2 years ago
6 0
This question is a bit tricky to answer because it does not state how often interest rate is applied so lets say for the simple 5% interest rate the rate of interest was calculated after 2 years you would pay a total interest of $15 since interest was only calculated once but for the 3% calculating every year with compound it would be a total of 18.27 dollars in interest but then you would have to calculate the 5% simple interest the same way which would total to $30 if calculated once a year being more than the 3% compound. But lets say interest is calculated once a month your total for the 5% simple interest would be $360 dollars interest for those 2 years and the 3% compound would be $406.97 dollars in interest. So over all the less amount of times interest compounds the less interest there is making it more worth than the simple but if the compounding occurs more frequently the simple 5% interest is more worth it. In this situation I think it might just be yearly interest which makes the 3% compound more worth taking for this short amount of time.
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prohojiy [21]

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

Download xlsx
5 0
2 years ago
For a continuous review​ policy, 74% cycle service​ level, lead time equals 1.5​ weeks, and standard deviation of weekly demand​
svet-max [94.6K]

Answer:

C. 157

Explanation:

Safety stock = Z-score *  Standard deviation of average demand * √lead time

Z-score for 74 % service level is 0.643

Standard Deviation of demand is 200

Lead Time = 1.5 weeks

Safety stock = 0.643 * 200 * √1.5

Safety stock = 0.643 * 200 * 1.224745

Safety stock = 157.502

6 0
2 years ago
On december 31, 2015, wintergreen, inc., issued $150,000 of 7 percent, 10-year bonds at a price of 93.25. wintergreen received $
alexandr1967 [171]
The entry to record the issuance includes a debit to Cash for $139,875 (or par of $150,000 x 0.9325=139,875), a debit to Discount on Bonds Payable for $10,125 (or par value of $150,000 - issue price of $139,875), and a credit to Bonds Payable for $150,000 (the par <span>value).
</span>Amount repaid = Interest payments of $105,000
20 x ($150,000 x 7% x ½))  = $105,000 + $150,000 (par value paid at maturity)= $255,000
Total bond interest expense = $255,000 – $139,875 = $115,125
7 0
3 years ago
Discuss 2 of the 10 Marketing trends that I went over. Answer the following questions: 1. What is the trend? 2. How does it impa
tester [92]

Explanation:

The 2 of the market trend which I am going to discuss is that.

1. Customer experience: Nowadays you need not go to customer, convince and make them to buy the product. Nowadays, people get huge information online and then they shop. So given customer experience is vital to be on road

2. Live platform: People's interest has been changed from time to time. Now its all the live platform where the people spend lot of time over the recorded video.

Answers for the questions asked:

1. The thing which people likes the most at present and it keeps changing.

2. A product will be sold, only if the people mass likes it.

3. Trend cannot be eliminated. It keeps changing.

4. Do things which are trendy.

7 0
3 years ago
2014, Herron Resources purchased Stinson Tile for $4.5 million. On December 31, 2020, the Stinson division reported net assets o
V125BC [204]

Answer:

Loss on impairment 1,700,000

                                   Goodwill           1,700,000

Explanation:

Herron Resources has an impairment for The Stinson division.

The Stinson division reported net assets of $5,600,000 (including $1,800,000 of goodwill) and the fair value is estimated to be only $3,900,000.

So  $5,600,000 - $3,900,000 = $ 1,700,000

This is how we recognize as an impairment so we need to register the loss and the - at the Goodwill:

Loss on impairment 1,700,000

                                   Goodwill           1,700,000

5 0
3 years ago
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