Answer: c. greater because interest rate changes have a greater impact on distant cash flows than near-term cash flows.
Explanation:
Interest rate changes have a greater impact on distant cashflows because those cashflows will be exposed to the interest rates for longer. This means that they will be subjected to more discounting than a cashflow that is due in one year which would be subject to only a single year of discounting.
For instance, assume the required rate of return for two investments is 10%. One investment yields $10,000 in 20 years and another yields $10,000 in 2 years .
The present value of both are:
= 10,000 / (1 + 10%)²⁰ = 10,000 / ( 1 + 10%)²
= $1,486.43 = $8,264.46
<em>Notice the difference. The longer term investment was more exposed to interest rate effects. </em>
False, a cultural tourist wants to preserve the cultural/traditions of the local people.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Total fixed costs= 300,000
Total costs= $450,000
Units= 120,000
A) Unitary variable cost= 150,000/120,000= $1.25
B) Units= 75,000
<u>The fixed costs remain constant no matter how many units are made (between relevant ranges).</u>
Total fixed costs= $300,000
C) UNits= 160,000
Total variable costs= 1.25*160,000= $200,000
D) Units= 180,000
Total fixed costs= 300,000
Total variable costs= 1.25*180,0000= 225,000
Total costs= $525,000
Answer:
Option B Depreciation expense
Explanation:
The allocation of cost of the plant and equipment for the period being used is the concept of depreciation and is a period cost because when the asset is purchased its value decreases gradually with time which means some of the machinery value would be deminish during the year depending upon the technological factors, life of the equipment, etc. So the period cost will arise regardless of that we either use the asset or not which is the definition of period cost which in this case is depreciation cost and the allocation of cost of plant and equipment over its useful life is also depreciation cost.
Answer:
C)
Explanation:
I'm not too sure but I think they can all change really depending on the circumstances. hope that helped!
