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3 years ago

What is the present value of a $1,200 payment made every year forever when interest rates are 4.5 percent

Business

1 answer:

ollegr [7]3 years ago

6 0

Answer:

26,666.67

Explanation:

A $1,200 payment is made forever

The interest rate is 4.5%

= 4.5/100

= 0.045

Therefore the present value can be calculated as follows

= 1,200/0.045

= 26,666.67

Hence the present value is 26,666.67

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Mandolin produced 70,000 units and sold 50,000 units. Their unit selling price is $20 and they have variable unit production cos

katovenus [111]

Answer:

Explanation:

The computation of the net income under variable costing is presented below:

Sales (50,000 × $20) $1,000,000

Less: Variable production cost (70,000 × $10) -$700,000

Cost of goods available for sale $700,000

Less: Ending inventory (20,000 × $10) -$200,000

Cost of goods sold -$500,000

Gross contribution margin $500,000

Less: Variable Selling and administrative expenses (50,000 × 3) $150,000

Contribution margin $350,000

Less: Fixed overhead $10,000

Net income $40,000

5 0

3 years ago

Jefferson Company has sales of $300,000 and cost of goods available for sale of $270,000. If the gross profit ratio is typically

Anna71 [15]

Answer:

A. $60,000

Explanation

Calculation for what the estimated cost of the ending inventory under the gross profit method would be

First step is to calculate the Gross profit

Gross profit= $300,000 *30%

Gross profit= $90,000

Second Step is to calculate the cost of goods sold

Cost of goods sold=$300,000-$90,000

Cost of goods sold= $210,000

Last step is to calculate the estimated cost of the ending inventory under the gross profit method

Using this formula

Estimated cost of the ending inventory=

Cost of goods available for sale- Cost of goods sold

Let plug in the formula

Estimated cost of the ending inventory=$270,000-$210,000

Estimated cost of the ending inventory=$60,000

Therefore the estimated cost of the ending inventory under the gross profit method would be $60,000

4 0

3 years ago

1. A county uses the GAAP basis to report encumbrances. At the end of 2020 there are purchase orders outstanding, for which the

hram777 [196]

Answer:

A. Expenditures for 2020 will include the $40,000 purchase orders.

Explanation:

The only accounting technique or principle that is accepted by GAAP which is generally known as the generally accepted accounting principles, is the accrual basis accounting technique. This technique pertains to the matching principle by recording the income whenever it is earned and expenses as they happen.

The four fundamental constraints that are associated with GAAP include materiality, objectivity, consistency and prudence.

4 0

3 years ago

Why is a w-2 form so important

amm1812

Answer:

The IRS requires employers to report wage and salary information for employees on Form W-2. Your W-2 also reports the amount of federal, state and other taxes withheld from your paycheck. As an employee, the information on your W-2 is extremely important when preparing your tax return.

7 0

3 years ago

Storico Co. just paid a dividend of $3.15 per share. The company will increase its dividend by 20 percent next year and then red

Elanso [62]

Answer:

$61.29

Explanation:

Calculation for what Storico Co. Share of stock will sell today.

Since we have a stock that has a normal growth in which the dividend growth changes every year for the first four years. We can therefore find the price of the stock in Year 3 because the dividend growth rate is constant after the third dividend, which means the price of the stock in Year 3 will be the dividend we are going to use in Year 4, we shall then divide it by the required return less the constant dividend growth rate.

Therefore the price in Year 3 will be calculated as :

P3= $3.15(1.20)(1.15)(1.10)(1.05) / (.12 – .05)

P3= $5.020785/0.07

P3=$71.72

Let find the price of stock today using the PV of the first three dividends in addition with the PV of the stock price in Year 3:

Hence,

P0= $3.15(1.20)/(1.12) + $3.15(1.20)(1.15)/1.12^²+ $3.15(1.20)(1.15)(1.10)/1.12^³+ $71.72/1.12^³

P0=$3.78/1.12+$4.347/1.2544+$4.7817/1.404928+$71.72/1.404928

P0=$3.375+3.465+3.4035+$51.048

P0= $61.29

Therefore if the required return on the company’s stock is 12% what the share of stock will sell for today will be $61.29

8 0

3 years ago