Answer:
$850
Explanation:
Data provided in the question:
Initial investment = $15,000
Expected annual net cash flows over four years, R = $5,000
Return on the investment = 10% = 0.10
Present value of an annuity factor for 10% and 4 periods, PVAF = 3.1699
The present value of $1 factor for 10% and 4 periods = 0.6830
Now,
Net present value = [ R × PVAF ] - Initial investment
= [ $5,000 × 3.1699 ] - $ 15,000
= $15,849.50 - $ 15000
= $849.50 ≈ $850
Answer:
(a) $3,444,444.44
(b) $11,160,000
Explanation:
(a) Effective purchasing power:
= Loan amount ÷ (1 + cumulative inflation rate)
= $6,200,000 ÷ (1 + 0.80)
= $6,200,000 ÷ 1.80
= $3,444,444.44
Therefore, the effective purchasing power of the $6,200,000 is $3,444,444.
(b) Lender should be repaid:
= Loan amount × (1 + cumulative inflation rate)
= $6,200,000 × (1 + 0.80)
= $6,200,000 × 1.80
= $11,160,000
Answer: d. Requires description of all significant accounting policies to be included as an integral part of the financial statements.
Explanation:
There are several accounting and valuation policies that a company can use when presenting its financial information for the year. Companies are meant to follow the policies that would most fairly represent their assets and liabilities.
When they pick these valuation methods, it is important that the people who study their financial statements know the valuation and accounting methods used so that they can understand the figures.
To this end, ASC Topic 235 requires that the company should include the significant accounting policies that it used as notes so that financial statement users understand how the company reached the figures it recorded.
For the answer to the question that is being asked and shown above, it is "TRUE." <span>The value of a cash budget is that it helps you predict and supply your future cash needs. This statement is true as far as the value of a cash is concerned.</span>
