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sesenic [268]
2 years ago
8

55.The manager of Bonzai's Boutique has approved Carla's application for credit. The maximum payment that has been approved is $

95 a month for 24 months. The APR is 16 percent. What is the maximum initial purchase that Carla can make given this credit approval
Business
1 answer:
rosijanka [135]2 years ago
8 0

Answer:

$1,916.2

Explanation:

A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity. In this question the payment of $95 per month for 24 months at APR of 16% is an annuity.

Formula for Present value of annuity is as follow

PV of annuity = P x [ ( 1- ( 1+ r )^-n ) / r ]

Where P = Annual payment = $95

First, Calculate the effective rate

EAR = ( 1 + 16%/12 )^12 - 1 = 17.2%

r = rate of return = 17.2% annual = 17.2% / 12 = 1.44% per month

n = number of years = 24 months

Placing value in the Formula

PV of annuity = $95 x [ ( 1- ( 1+ 1.44% )^-24 ) / 1.44% ]

PV of Annuity = $1,916.2

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Answer:

Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.

Explanation:

The journal entry is given below

Insurance expense A/c Dr $2,400

        To Prepaid Insurance $2,400

(Being insurance expense is recorded)

The computation is shown below:

= Insurance premium ÷ number of months × required months

= $4,800 ÷ 4 months × 2 months

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The 2 months is taken from November 1 to December 31

6 0
3 years ago
You are considering opening a donut restaurant aimed primarily at the breakfast market. You plan to sell donuts, coffee, and oth
stich3 [128]

Answer:

Donuts= 28,571

Explanation:

<u>First, we need to determine the sale proportion of each product:</u>

Other items= 2/5= 0.4

Coffe= 2/5= 0.4

Donut= 1/5= 0.2

<u>Now, we can calculate the break-even point in units for the company as a whole:</u>

Break-even point (units)= Total fixed costs / Weighted average contribution margin

Break-even point (units)= 100,000 / (0.5*0.2 + 0.5*0.4 + 1*0.4)

Break-even point (units)= 100,000 / 0.7

Break-even point (units)= 142,857 units

<u>Now, the number of donuts:</u>

<u />

Donuts= 0.2*142,857

Donuts= 28,571

3 0
3 years ago
_____ comprises a range of practices concerned with increasing awareness, fostering learning, speeding collaboration and innovat
vesna_86 [32]
Knowledge management comprises a range of practices concerned with increasing awareness, fostering learning, speeding collaboration and innovation, and exchanging insights of individuals, teams, or entire organizations.
7 0
3 years ago
Durable goods $3,000 Services 6,000 Business purchases of capital goods 400 Fixed investment 850 Exports 600 Imports 800 Nondura
ASHA 777 [7]

Answer:

$9,700

Explanation:

The computation of the consumption is shown below;

= Durable goods + Services + Non-durable goods

= $3,000 + $6,000 + $700  

= $9,700  

We simply added the durable goods, services and the non-durable goods so that the consumption could be come

Hence, the consumption is $9,700

Therefore the same is to be considered

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3 years ago
Sort each description into the category where it fits best. Inflation and Deflation
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First three together in the first I think
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3 years ago
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