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3 years ago

When reporting inventory using the lower of cost or market, market should not be less than:

Business

1 answer:

Natali5045456 [20]3 years ago

3 0

Answer:

Net realizable value less a normal profit margin.

Explanation:

Lower of cost or market rule of inventory states that cost of inventory recorded must be that at which cost is lower, and the original cost is the current market price.

This occurs when the inventory has become obsolete, market price has declined, or inventory has deteriorated

Net realisable value is defined as selling price minus estimated cost of completion.

So the market value should not be less than net realizable value less a normal profit margin.

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Joanette, Inc., is considering the purchase of a machine that would cost $520,000 and would last for 7 years, at the end of whic

Dovator [93]

Answer:

Net present value = -$22,531

Explanation:

As per the data given in the question,

Computation of NPV project

Particulars Period Pv factor at 14% Amount Present value

Cash inflows:

Annual saving in costs 1-7 4.288305 $112,000 $480,290

Salvage value 7 0.399637 $52,000 $20,781

Recovery of working capital 7 0.399637 $6,000 $2,398

Present value of cash inflows $503,469

Less: Cash outflows

Cost of Machine 0 1 $520,000 $520,000

Working capital 0 1 $6,000 $6,000

Net present value -$22,531

Working Note

The present value of cash inflows is

$480,290+ $20,781+$2,398 = $503,469

And, the net present value is

= $503,469- $520,000-$6,000

= -$22,531

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3 years ago

You manage marketing for a small business on a tight budget, yet you need to reach as many people as possible. How can Google Ad

Crazy boy [7]

Answer:

While google ads may be expensive, it spreads the word around quicker because 98% use google. seeing an ad might interesting them into to the buisness.

Explanation:

8 0

3 years ago

You are considering in investing one of the two options: Investment A requires a $255,000 upfront payment from you and generates

Ainat [17]

Answer:

Option (E) Never

Explanation:

NPV from Investment Project 1 = ($255,000) + $21,000 / (r)

NPV from Investment Project 2 = ($175,000) + $29,000 / (r)

The question says that find the number of years that equals the total return which means the NPV from both investments is equal:

($255,000) + $21,000 / (r) = ($175,000) + $29,000 / (r)

$21,000 / (r) - $29,000 / (r) = $255,000 - $175,000

-$8000 / r = $80,000

r = - 8000 / 80000 = -0.01 = - 10%

The negative sign shows that project A can not make a positive NPV that will be equal to that of project B and vice versa. It can also be illustrated by putting the value of r in "NPV from Investment Project 1"

NPV from Investment Project 1 = ($255,000) + 21000 / -0.01

= ($255,000) - $210,000 = ($465,000)

This shows that the company will have to make losses of $465,000 which is not possible because company will not select projects with negative NPVs.

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3 years ago

Typically, you will receive a very low interest rate on money you deposit in a bank. Interest rates on car loans and business lo

Pavlova-9 [17]

Answer: A bank complies with the necessary permits to manage the resources of its clients.

Explanation: Banks must have a minimum level of liquidity to answer for the money they keep and for that security is that the rates paid are lower. As for a vehicle loan or corporate loans, they maintain the necessary terms and conditions so that the client can pay the fair interest and the documents are formal compared to the companies that grant loans without backing.

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3 years ago

In January, Hometown Ice Cream Shoppe reported the following balances in their income statement accounts. Based on this informat

Gekata [30.6K]

Answer:

A) Debit of $1,445

Explanation:

Closing entries refers to the balance statements that are entered at the end of an accounting period in order to transfer the temporary account balances into permanent accounts. Based on the balances listed in the question it can be said that the closing entry to retained earnings will be Debit of $1,445. This refers to money going out of the account and can be calculated by adding all the revenue to the account and subtracting the expenses leaving $ - 1,445 thus being debit.

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3 years ago