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Alina [70]
3 years ago
14

A small foundry agrees to pay $220,000 two years from now to a supplier for a given amount of coking coal. The foundry plans to

deposit a fixed amount in a bank account every three months, starting three months from now, so that at the end of two years the account holds $220,000.
If the account pays 12.5% APR compounded monthly, how much must be deposited every three months?


A) $24,602

B) $27,063

C) $29,523

D) $31,983
Business
1 answer:
MaRussiya [10]3 years ago
3 0

Answer:

A) $24,602

Explanation:

We can solve this question by finding the periodic deposits needed by using the formula:

FV=PMT*\frac{(1+i)^n-1}{i}

where:

FV= future value   = $220,000

PMT = periodic deposits required = ???

i = effective  interest rate per period = 0.0331

n= number of deposits = 8

However, since the interest is compounded monthly, let's also  calculate the effective interest rate

Effective interest rate = (1+\frac{r}{m}) ^m-1

where; r = 12.5% = 0.125

(1+\frac{0.125}{12})^{12} -1

= 0.1324

Interest rate per period = \frac{0.1324}{4}

= 0.0331

Then;

220,000=PMT*\frac{(1+0.033)^8-1}{0.033}

220,000 = PMT × 8.986

PMT = \frac{220,000}{8.986}

PMT = $ 24,482.5

Since A) $24,602 is closer to $ 24,482.5

Therefore,  $ $24,602  must be deposited every three months

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"a branding strategy in which a firm uses a different brand for each of its products is called ____ branding."
Aleksandr-060686 [28]
<span>A branding strategy in which a firm uses a different brand for each of its products is called individual branding. With the use of this strategy, products from the same company are given a unique identity and name. This is especially useful when companies offer a wide range of products that cater different price markets. </span>
8 0
3 years ago
When Ford was slow to recall vehicles to fix a possible carbon monoxide leak, it was most likely due to ________, because Ford w
Vladimir79 [104]

Answer: Overconfidence bias

Explanation:

The options are:

a. overconfidence bias

b. hindsight bias

c. framing bias

d. escalation of commitment bias

e. sunk-cost bias

Overconfidence bias is when people or organization believe so much in their ability, knowledge, talent, or skills which invariably leads them to believe that they are better than the way they really are. It is an ego belief and can have a dangerous effect.

Ford was slow to recall vehicles to fix a possible carbon monoxide leak due to overconfidence bias as they believe that they are a force to be reckoned with and can't make such mistakes.

5 0
3 years ago
You are evaluating the balance sheet for PattyCake’s Corporation. From the balance sheet you find the following balances:
goldenfox [79]

Answer:

Explanation:

Current Assets are those asset which will be liquidated within next one year.

cash and marketable securities        $360,000

accounts receivable                           $1,280,000

inventory                                             <u>$2,180,000</u>

Total Current Assets                          <u>$3,820,000</u>

Current Liabilities are those which is payable within next one year.

accrued wages and taxes                   $540,000

accounts payable                                $840,000

notes payable                                      <u>$680,000</u>

Total Current Liabilities                       <u>$2,060,000</u>

Current ratio measures the capability of a business to pay the current liabilities if it becomes due.

Current Ratio = Current Assets / Current Liabilities = $3,820,000 / $2,060,000 = 1.85 times

5 0
3 years ago
A seller listed a home for $200,000 and agreed to pay a commission rate of 5%. The MLS stated that the commission would be share
earnstyle [38]

Answer:

The selling sales associate received $2,700

Explanation:

The final number was 180 thousand dollars. Then the MLS chared 5% of the total sale. Thus, 9 thousand dollars is the commission. Now, the commission was divided again and the sales associate received 50% of the listing office's commission. So those 9000 are divided in 2 and we get 4500 which then are divided and the selling sales associate receives the 60% of that amount or 2700 dollars.

4 0
3 years ago
PA11.
NARA [144]

Answer:

Using Traditional allocation method

Allocation rate per unit

=<u> Budgeted overhead</u>

  Budgeted direct labour hours

Brass

Overhead allocation rate

= <u>$47,500</u>

  700 hours

=  $67.86 per direct labour hour

Gold

= <u>$47,500</u>

   1,200 hours

=  $39.58 per direct labour hour

Using activity-based costing

Brass

Allocation rate for material cost pool                                                                                                                                                  

= <u>$12,500</u>

   400

=  $31.25 per material moved

Gold

Allocation rate for material cost pool

= <u>$12,500</u>

   100    

= $125 per material moved

Brass

Allocation rate for machine set-up pool

= <u>$35,000</u>

  400

= $87.50

Gold

Allocation rate for machine set-up pool  

= <u>$35,000</u>

   600

= $58.33                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Explanation:

Using traditional allocation method, the overheads for material cost pool and machine set-up pool will be added. The overhead allocation rate per unit is the division of total overhead by the direct labour hours for each product.        

Using activity-based costing, the material cost pool overhead  will be divided by the material moved for each product in order to obtain allocation rate for each product.                                                                                                                                                                

The allocation rate for machine set-up pool is obtained by dividing the machine set-up overhead by the number of machine set-up for each              product.                                                                                      

4 0
3 years ago
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