Answer:
the present value of the property taxes is 75,000
Explanation:
We can determinate the present value of all the future payment using the perpetuity formula:
150,000 x 2% = 3,000 property taxes per year as this will be paid indefinitely and the cash flow are equal; it is a perpetuity.
C/r = PV
3,000 / 0.04 = PV = 75,000
Answer:
The answers are:
- The CPI for 2009 is 100 (since it is the base year)
- The CPI for 2010 is 129.17
- The inflation rate for 2010 is 29.17%
Explanation:
<u>CPI basket for 2009</u>
- 6 razors x $20 per razor = $120
- 4 bottles of cologne x $30 per bottle = $120
The total value of the CPI basket for 2009 is $240
<u>CPI basket for 2010</u>
- 6 razors x $25 per razor = $150
- 4 bottles of cologne x $40 per bottle = $160
The total value of the CPI basket for 2010 is $310
- The CPI for 2009 is 100, since it is the base year
- The CPI for 2010 = (CPI basket 2010 / CPI basket 2009) x 100 = ($310 / $240) x 100 = 129.17
- The inflation rate for 2010 = [(CPI basket 2010 / CPI basket 2009) - 1] x 100 = (1.2917 - 1) x 100% = 29.17%
Answer: $800,000
Explanation:
Day sales Outstanding = 40 days
Annual sales = $7,300,000
Total days for the year = 365 days
We need to know the average sales per day which will be:
= $7,300,000 / 365
= $20,000
DSO = Account receivable / Average sales per day
40 = Account receivable / 20,000
Account receivable = 40 × 20,000
= $800,000
Therefore, the account receivable balance is $800,000
