Answer:
if Andre orders 500 boxes at a time his anual inventory cost with holding cost included should be $150,030.
Explanation:
Answer:
True
Explanation:
Prime's net realizable value of accounts receivable = accounts receivable balance - allowance for uncollectible accounts = $100,000 - $7,000 = $93,000
Bad debt expenses have already been debited, so they are no longer part of the allowance for uncollectible accounts.
Answer:
PV(after-tax net return in 7th year) = 70.55 (Approx)
Explanation:
Given:
Number of year = 7
Pre-tax net returns (Fn) = $100
Growth rate = 4% = 0.04
Inflation = 3% = 0.03
Marginal tax rate = 30% = 0.3
Discount rate = 10% = 0.1
Computation:
Fn = Fo(1+g)ⁿ = 100(1.04)⁷
Fn = 131.6
Nominal net returns = 131.6(1.03)⁷
Nominal net returns = 161.85
After tax return = 161.85 (1 - 0.3)
After tax return = 113.30
After-tax, risk adjusted discount rate = 0.1(1-0.3) = 7%
PV(after-tax net return in 7th year) = 113.30
(1+0.07)⁻⁷
PV(after-tax net return in 7th year) = 70.55 (Approx)
Answer:
the answer for the first question is $166667.
the answer for the second question is $210526
the answer for the third question is An inverse.
Explanation:
given information that i will invest in a $10000 scholarship that will pay forever.
the interest rate charged is 6.00% per annum therefore this is a perpetuity present value problem where there is streams of income forever therefore we use the formula :
Pv of perpetuity= Cf/r
where Cr is the cash flows payed by the single investment forever in this case $10000 then r is the interest rate of the investment amount which is 6% in this case.
Pv of Perpetuity= $10000/6%
=$166667 therefore i must invest this amount to get the scholarship running with streams of $10000 forever.
in the second problem if now the interest rate is changed from 6% to 4.75% then the amount to be invested would be :
Pv of perpetuity = $10000/4.75%
=$210526 therefore this is the amount to be invested for a forever $10000 stream of incomes for a scholarship.
the relationship is indirect cause as the interest rate decreases the present value of the perpetuity that must be invested increases.
