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Andreyy89
3 years ago
12

Different compounding periods, are used for different types of investments. In order to properly compare investments or loans wi

th different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The__________ interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate (APR). If the compounding periods for different securities is the same, then you____________ use the APR for comparison. If the securities have different compounding periods, then the____________ must be used for comparison. Here, M is the number of compounding periods per year and INOM/M is equal to the periodic rate (IPER). If a loan or investment uses___________ compounding, then the nominal interest rate is also its effective annual rate. However, if compounding occurs more than once a year, EAR is___________ INOM. Quantitative Problem: Bank 1 lends funds at a nominal rate of 6% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank 2 would like to charge the same effective annual rate as Bank 1, what nominal interest rate will they charge their customers? Round your answer to three decimal places. Do not round intermediate calculations.__________ %
Business
1 answer:
KengaRu [80]3 years ago
4 0

Answer:

Explanation:

The <u>nominal</u> interest rate is quoted by borrowers and lenders-------------

then you <u>can</u> use the APR------------

different compounding periods, then the effective annual rate must------

If a loan or investment uses <u>annual</u> compounding, then the nominal--------

However, if compounding occurs more than once a year, EAR is the effective INOM

Quantitative problem:

Effective annual rate of Bank 2 (assuming its APR is 6%) = (1.015)^4 – 1 = 0.061364

To get the same EAR, Bank 1 should charge per half year 1.061364^(1/2) – 1 = 0.030225

The nominal interest rate (APR)= 0.030225*2 = 0.06045 = 6.05%

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On April 1, 2013, Four Seasons Landscaping, LLC purchased new lawn mowers for $70,000 in cash (total cost). They have a useful l
creativ13 [48]

Answer:

Please see the calculation explanation below and the depreciation expense chart for all methods is attached.

Explanation:

1. STRAIGHT-LINE DEPRECIATION METHOD:

<em>Depreciation Expense = (Total Cost - Residual Value) / Useful Life </em>

Depreciation Expense = ($70,000 - $10,000) / 3 years

Depreciation Expense = $60,000 / 3 years

Depreciation Expense = $20,000 per year

2. DOUBLE DECLINING BALANCE DEPRECIATION METHOD:

<em>Depreciation Expense Rate = (100% / Useful Life) x 2 </em>

Depreciation Expense Rate = (100% / 3) x 2

Depreciation Expense Rate = 66.67%

<em>2013: </em>

Depreciation Expense = $70,000 x 66.67% = $46,667

<em>2014: </em>

Depreciation Expense = ($70,000 - $46,667) x 66.67% = $15,556

Since the residual value is $10,000 and as per Double Declining Balance Method, the point at which Book Value is equal to the residual value, no depreciation is taken.

<em>Depreciation Expense = (Total Cost - Residual Value) - (Accumulated Depreciation) </em>

Depreciation Expense = ($70,000 - $10,000) - ($46,667)  

Depreciation Expense = $13,333

<em>2015: </em>

No Depreciation Expense for year 3, as Book value is already equal to residual value in year 2.

3. PER HOUR DEPRECIATION METHOD:

<em>2013:</em><em> </em>

<em>Depreciation Cost per hour = (Engine Hours in 2013 / Total Engine Hours) x (Total Cost - Residual Value) </em>

Depreciation Cost per hour = (500 / 1,200) x ($70,000 - $10,000)

Depreciation Cost per hour = $25,000

<em>2014: </em>

<em>Depreciation Cost per hour = (Engine Hours in 2014 / Total Engine Hours) x (Total Cost - Residual Value) </em>

Depreciation Cost per hour = (400 / 1,200) x ($70,000 - $10,000)

Depreciation Cost per hour = $20,000

<em>2015: </em>

<em>Depreciation Cost per hour = (Engine Hours in 2015 / Total Engine Hours) x (Total Cost - Residual Value) </em>

Depreciation Cost per hour = (300 / 1,200) x ($70,000 - $10,000)

Depreciation Cost per hour = $15,000

6 0
3 years ago
A person in the organization has the ability to given bonuses to employees as part of a corporate compensation program. This is
skad [1K]

A person in the organization has the ability to given bonuses to employees as part of a corporate compensation program. This is an example of reward power.

<h3>What is reward power?</h3>

This is a term that is used formally in the workplace to refer to  a power that has been given by people to give out rewards to other workers in the workplace.

A supervisor who gives incentives to workers is an example of a person that holds such a power.

Raed more on reward power here:

brainly.com/question/4068765

#SPJ1

7 0
2 years ago
The Cutting Department of Sheridan Company has the following production and cost data for July.
alina1380 [7]

Answer:

1.                                                                   Materials       Conversion Costs

Total equivalent units of production        17,200                  15,800  

2. Cost per Equivalent Unit                    $ 4.05                           $ 2.6

Explanation:

Cutting Department

Weighted-Average Method

1. Equivalent Units

Particulars              Units       % of Completion       Equivalent Units

                                     Materials Conversion   Materials Conversion

Transferred Out    13,700     100         100             13,700      13,700

<u>Ending Inventory     3500      100          60             3500        2100    </u>

<u>Total Equivalent Units                                             17,200      15,800  </u>

<em>The Ending Inventory  units are 3500 which are not yet complete. </em>

                                                                   Materials       Conversion Costs

Total equivalent units of production        17,200                  15,800  

2. Cost Per Equivalent Units

                                                    Materials         Conversion

Cost Added                               69,660                18,480 + 22,600

                             

Total Costs                                69,660                  41,080

Equivalent Units                       <u> 17,200                    15,800 </u>

Cost per Equivalent Unit             69,660 / 17,200         41,080/ 15,800  

                                                    $ 4.05                           $ 2.6

Cost of Ending Work In Process  $ 19635

Materials = 3500 * $ 4.05= $ 14175

Conversion = 2100 * $ 2.6=  $ 5460

We multiply the equivalent number of units with the cost per unit to find the cost.

Cost Of Units Transferred Out = $ 91,105

Materials = 13,700 * $ 4.05= $ 55,485

Conversion = 13,700 * $ 2.6 =  $ 35620

B. A Cost Reconciliation Report

                                    Materials              Conversion

Ending WIP                     $ 14175                  $ 5460

<u>Transferred Out             $ 55,485              $ 35620</u>

<u />

<u>Total                                 $ 69660                 41080   </u>

These calculated costs reconcile with the costs given in the above data.

                                                  Materials              Conversion

<u>Cost Added                               69,660                18,480 + 22,600</u>

<u>Total Costs                                69,660                  41,080</u>

<u></u>

These costs reconcile with the given costs.

5 0
3 years ago
Recording partner's original investment Instructions Kimberly Payne and Arionna Maples decide to form a partnership by combining
levacccp [35]

Answer and Explanation:

The Journal entry is shown below:-

Cash A/c Dr, $20,000  

Accounts Receivables A/c Dr, $140,000

($145,000 - $5,000)

Inventory A/c Dr, $101,700  

Equipment A/c Dr, $81,200.

     To Allowance for doubtful Accounts $4,400

     To Payne's Capital A/c $338,500

(Being assets contributed by partner in business is recorded)

For recording the assets contributed by partner in business we simply debited the cash account, accounts Receivables, Inventory and Equipment as increase the assets while we credited the Allowance for doubtful Accounts as it decreasing the assets and Payne's Capital as increasing the stockholder equity.

7 0
3 years ago
Fiedler's contingency theory of leadership suggests that leaders should be placed in leadership situations that best fit with th
rodikova [14]

Answer:

Explanation:

Suppose, you are a team leader & perhaps your opinion is huge and respected by your workers. Then;

Opinion is better-suited for relationship-motivated leadership

However, let say you're promoted from your post to another position to lead a team, it is possible that your followers will get bitter due to the fact that you're being promoted. In this case;

Confident is better-suited for  relationship-motivated leadership

Similarly, a scenario where we can have a task motivated leadership is as follows:

Let assume that, your workers are working on a project and you're not present there as a team leader.

Then, Achieve is better suited for task-motivated leadership

8 0
2 years ago
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