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olchik [2.2K]
3 years ago
8

On January 1, Garcia Supply leased a truck for a three-year period, at which time possession of the truck will revert back to th

e lessor. Annual lease payments are $17,000 due on December 31 of each year, calculated by the lessor using a 5% discount rate. Negotiations led to Garcia guaranteeing a $47,700 residual value at the end of the lease term. Garcia estimates that the residual value after four years will be
Business
1 answer:
Brut [27]3 years ago
3 0

Answer:

PV=?

N=3

FV= 47,700

PMT= 17,000

I= 5%

Put values in financial calculator

Pv=$87,500

Now use this value to calculate residual value at the end of year 4

PV= 87,500

N=4

Fv=?

PMT= -17,000

I=5

$33,084= residual value in 4 years.

Explanation:

You might be interested in
It is claimed that mutual funds have two advantages. The first is that mutual funds allow people with small amounts of money to
romanna [79]

Answer:

The correct answer is d. Economists strongly agree with the first claim, but are skeptical of the second.

Explanation:

A mutual fund is an investment alternative that consists of contributions from natural and legal persons (called participants or contributors), to form equity for their investment in shares, debt instruments or fixed income, or a combination of both ( shares + fixed income). They offer a diversified investment alternative since they invest in numerous instruments at the same time. These instruments vary according to the type of fund and are defined by the investment policy regulated by the Superintendency of Securities and Insurance. They are managed by corporations called General Fund Administrators (AGF) that are chosen by the participants themselves. It is important to choose both the administrator and the type of fund based on what best suits each personal situation.

5 0
4 years ago
Consider three closed economies. In the first economy, households spend $0.50 of each additional dollar they earn and save the r
aleksklad [387]

Answer:

b. In the first economy, the spending multiplier is greater than in the second economy. In the third economy, the spending multiplier is undefined

Explanation:

This can be easily understood by going through some calculations in a spending multiplier formula.

WORKINGS

The formula for Spending Multiplier = \frac{1}{MPS}

Spending Multiplier

Economy 1: Multiplier = \frac{1}{0.5} = 2

Economy 2: Multiplier = \frac{1}{1} = 1

Economy 3: Multiplier = \frac{1}{0} = undefined

Note: MPS can be abbreviated as Marginal propensity to save

As we can see here economy 1 is 50% greater than economy 2 and economy 3 is undefined because they spend whole dollar they earn additionally.

On behalf of the above calculations,  option B is a perfect match!

4 0
3 years ago
2. A depositor puts $25,000 in a saving account that pays 5% interest, compounded semiannually. Equal annual withdrawals are to
Umnica [9.8K]

Answer:

The correct answer is $1265.60.

Explanation:

According to the scenario, the given data are as follows:

Present Value (PV) = $25,000

Rate of interest = 5%

Rate of interest ( semi annual) (r) = 2.5%

Time period (semi annual) = 2

So, First we calculate the effective annual interest rate,

Effective annual interest rate =  ( 1 + r)^n  = (1.025)^2 -1

=5.0625%

So, Annual Withdrawal = PV × Effective annual interest rate

by putting the value, we get

Annual withdrawal = $25,000 × 5.0625%

= $1265.60

7 0
3 years ago
A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout th
Sav [38]

Answer:

Equivalent units of production= 68,000 units

Explanation:

Giving the following information:

Units started and completed= 80,000 - 20,000= 60,000

Units in ending inventory= 20,000 nits that were 40% complete in the ending work in process inventory at the end of January.

<u>To calculate the equivalent units for conversion costs, we need to use the following formula:</u>

Units completed in the period + Equivalent units in ending inventory WIP (units*%completion) = Equivalent units of production

Equivalent units of production= 60,000 + (20,000*0.4)

Equivalent units of production= 68,000 units

5 0
3 years ago
A storm on one of the planets listed in the table lasted for 132 hours, or 5.5 of the planet's days. The equation 5.5h = 132 giv
padilas [110]

Answer:

<u><em></em></u>

  • <u><em>The planet is Earth</em></u>

Explanation:

<em>1. Equation (given)</em>:

  • 5.5h = 132

2. Solve by applying division property of equalities: divide both sides by 5.5

  • h = 132/5.5
  • h = 24.0

The equation gives the length in hours of a day, then the solution h = 24.0 means that the length of the day on the planet is 24.0 horas.

The table is:

Length of Day

Planet           Length of Day (hours)

Earth                   24.0

Mars                    24.7

Jupiter                  9.9

Therefore, the solution h = 24.0 shows that the planet is Earth.

5 0
3 years ago
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