Answer:
Barb will earn interest on interest yes because she don't retire the interest
Explanation:
a. Barb will earn compound interest both will aearn compound interest.
b. Barb will earn more interest the first year than Andy both are compound annualy. The first year both will earn the same amount of interest.
c. Barb will earn interest on interest yes because she don't retire the interest and reinvest it.
Compound interest (or compounding interest) is interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan
d. After five years, Andy will have more money in his account than Barb. No because he spend his interest.
e. Andy will earn more interest the first year than Barb both are compound annualy. The first year both will earn the same amount of interest.
Answer:
Find in the excel file attached detailed adjusting entries required for all transactions in the question.
Explanation:
Please note the analysis of each transaction done under the heading "particulars".
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
A friend of Mr. Richards recently won a law suit for $30 million. They can either take the payments over 10 years or settle today for cash of $25 million. Mr. Richard is optimistic that he can earn a 6% return on the money and that they should settle for $25 million today and he will invest it for them.
First, we need to find the present value of the 30 million.
To do that we need to calculate the final value.
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {3,000,000*[(1.06^10)-1]}/0.06= 39,542,385
PV= FV/(1+i)^n= 39,542,385/1.06^10= 22,080,261
B) Now we know that the present value of option B is higher. One dollar today is better than one dollar tomorrow. It is better to receive the money now to invest it.
Answer:
A) They would be indifferent, as Sally's income net of costs equals $25,000.
Explanation:
Sally's economic profit = accounting profit - opportunity costs
- accounting profit = $12,000
- opportunity costs = $25,000 - $15,000 in lost salaries + $2,000 (lost investment revenue) = $12,000
economic profit = $12,000 - $12,000 = $0
Since the economic profit is $0, Sally should be indifferent between running her own business or working for someone else.
Answer:
Cost of the inventory kept by Zephron Music is $3495
Explanation:
<u><em>Zephron Music purchased inventory for $4,400 and also paid a $260 freight bill</em></u>
Inventory $4660 (debit)
Trade Payable $ 4400 (credit)
Bank $260 (credit)
Recognise an Asset - Inventory and De-recognise asset - Bank
<u><em>Zephron Music returned 25% of the goods to the seller, took a 1% purchase discount</em></u>
Trade Payable $1212
Inventory $1165 (credit)
Discount Received $47 (credit)
Therefore Inventory Balance = $4660-1165 = $3495
