Answer:
b. Debit Cash, $3,600; credit Unearned Legal Fees Revenue, $3,600
Explanation:
The journal entry to record the given transaction is as follows
Cash Dr $3,600
To Unearned legal fees revenue $3,600
(Being the collection is recorded)
Since the collection is made so we debited the cash account and credited the unearned legal fees revenue so that the correct posting could be made
Hence, the correct option is b.
Answer: A) meeting a customer's expectations doesn't always lead to brand loyalty.
Explanation:
It is possible to meet the expectations of a supplier and the supplier would still move on if they feel like they would get a better deal somewhere especially if the other supplier meets their expectations even better than the first supplier did.
The company in question preferred that it received its parts all at once and the supplier could not do that but they were still able to supply the goods required. They were therefore meeting expectations but not in an adequate enough manner which is why the company found someone better.
Answer:
a. $4,322.74
b. Yes
Explanation:
a. The computation of December futures is shown below:-
December futures = June futures × (1 + 1.9%)
= $1490.60 × (1 + 1.9%)
= $1490.60 × 2.9
%
= $4,322.74
Since the current interest rate is 3.8% and the contract is expired in 6 months so we half the interest rate i.e 1.9%
b. Yes, there is an arbitration opportunity here due to the difference between the future price of December. The real futures price for December is $1,500 and the potential price for December's parity relationship is $4,322.74
Complete Question:
Venture capital required rate of return. Blue Angel Investors has a success ratio of 10% with its venture funding. Blue Angel requires a rate of return of 20% for its portfolio of lending, and the average length on its loans is 5 years. If you were to apply to Blue Angel for a $100,000 loan, what is the annual percentage rate you would have to pay for this loan?
Answer:
Blue Angel Venture Capital
The annual percentage rate to be paid for this loan is:
= 38%
Explanation:
a) Data and Calculations:
Blue Angel Loan = $100,000
Required rate of interest = 20%
Average length of Blue Angel loan = 5 years
Success ratio of venture funding = 10%
Annual loss sustained from loan = 20% * (100% - 10%)
= 20% * 90%
= 18%
Therefore the annual percentage rate to be paid for this loan is:
38% (20 + 18%)
b) The implication is that the required rate of return expected by Blue Angel will be weighed by its failure rate of 90%. This indicates additional cost of loan. Therefore, the total annual percentage rate is the addition of the required rate of return and the rate of loss sustained.
