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vivado [14]
3 years ago
12

A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next

3 years. If you pay the entire bill immediately, you can take a discount of 10% from the purchase price. Assume the product sells for $100. a-1. Calculate the present value of the payments if you can borrow or lend funds at an interest rate of 5 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2 Which is a better deal
Business
1 answer:
aev [14]3 years ago
6 0

Answer:

a-1. The present value of Plan 1 = $93.08

a-2. The deal 2 which involves paying immediately adn taking the 10% discount is better.

Explanation:

a-1.

The interest rate of 5% is taken as the discount rate to convert future cash flows into the present value.

The First payment plan with installments has a present value of,

Present Value-Plan 1 = 25 + 25/1.05 + 25/1.05² + 25/1.05³ = $93.08

a-2.

The first plan will cost $93.08 in the present value.

The second plan will involve immediate payment and a discount of 10%vwhch makes the present value of plan 2 as $90 (100 - (100*0.1)).

Thus, the second deal or deal involving immediate payment and taking the discount is better.

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Adriana Graphic Design receives $1,500 from a client billed in a previous month for services provided. What general journal entr
mario62 [17]

Answer:

Dr Cash $1,500

Cr Account Receivable $1,500

Explanation:

Based on the information given we were told that Adriana receives the amount of $1,500 from a client that was billed in a previous month for services provided which therefore means that the appropriate general journal entries that Adriana Graphic Design will make to record this transaction is:

Dr Cash $1,500

Cr Account Receivable $1,500

4 0
3 years ago
Differentiate the terms small business and entrepreneurial opportunity​
luda_lava [24]

Answer:

Small businesses usually deal with known and established products and services, while entrepreneurial ventures focus on new, innovative offerings. Because of this, small business owners tend to deal with known risks and entrepreneurs face unknown risks.

8 0
2 years ago
8. If the unemployment rate is below its natural rate, then ________. Group of answer choices output is above its potential leve
fgiga [73]

Answer:

Output is below its potential level.

4 0
3 years ago
__________is the process by which union representatives negotiate with the management of a firm to secure certain concessions on
kobusy [5.1K]

Collective bargaining is the process by which union representatives negotiate with the management of a firm to secure certain concessions on wages, benefits, job security, or seniority for union members.

Explanation:

Collective bargaining is a mechanism of discussions between the employers as well as a collective of employees who are aimed at arrangements to control salaries, terms of employment, pensions and other compensatory and workers ' rights aspects.

Such form of agreement is a contract of work and is also called a "collective bargaining arrangement" or CBA.

Examples include workplace salaries, hours, insurance, off-time, promotions and administrative issues in a variety of the areas addressed by CBAs involving management and workers.

6 0
3 years ago
Assume that you are an intern with the Brayton Company, and you have collected the following data: The yield on the company's ou
sergij07 [2.7K]

Answer:

The firm's WACC will be "8.04%".

Explanation:

The given values are:

Yield of maturity,

= 7.75%

Rate of tax,

= 40%

Next year's dividend,

= $o.65

Growth,

= 6%

Share price,

= $15

Flotation cost,

= 10%

w_d=45 \ percent

w_s=55 \ percent

Now,

= r_d(1-Rate \ of \ tax)

On substituting the values, we get

= 7.75(1-0.40)

= 4.65 \ percent

The r_e will be:

= \frac{D1}{p}\times (1-F)+G

= \frac{0.65}{15}\times (1-0.1)+6

= 4.81+6

= 10.81 \ percent

hence,

The firm's WACC will be:

= w_d(r_d)(1-T)+w_s(r_s)

= 0.45\times 4.65+0.55\times 10.81

= 2.0925+5.9455

= 8.04%

7 0
3 years ago
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