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statuscvo [17]
3 years ago
9

Suppose a state lottery prize of $8 million is to be paid in 5 payments of $1,600,000 each at the end of each of the next 5 year

s. If money is worth 12%, compounded annually, what is the present value of the prize? (Round your answer to the nearest cent.)
Business
1 answer:
slavikrds [6]3 years ago
7 0

Answer:

The answer is $5767641.92

Explanation:

PV of an Annuity = C x [ (1 – (1+i)-n) / i ]

PV of an Annuity = $1,600,000  x [ (1 – (1+0.12)-5) /0.12 ] = $5767641.92

The present value of the prize is $5767641.92

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During the adjusting process two transactions were missed. The first is for unearned rent revenue of which $450 was earned durin
masya89 [10]

Answer:

3. net income is understated by $175

Explanation:

There were two transactions omitted. The first transaction is unearned rent revenue of which $450 was earned. This earned rent revenue increases income by $450. While the second transaction was accrued interest payable of which $275 is owed. This interest payable increases liabilities by $275.

Therefore, from the above, income or revenue is understated by $450, while expenses is understated by $275.

Therefore, net income is understated by income less expenses, thus 450 - 275 = $175. This also implies that liabilities are overstated by $175.

4 0
3 years ago
Tobin Supplies Company expects sales next year to be $500,000. Inventory and accounts receivable will "increase $80,000" to acco
wel

Answer:

External funds needed = $40,000.

Explanation:

An increase in the firm's retained earnings (a component of the shareholder's equity) arises as a result of higher sales volume, thereby making the  Asset = Liability + Shareholder's Equity Equation unbalanced.

Therefore, there must be an increment in the firm's assets by an equal amount in order to re balance the equation. If there is an increase in assets by a greater magnitude than retained earnings increment, the gap is filled by external financing (which is a liability and increases the liability component of the equation).

Net income = Sales * profit margin = $500000*10% = $50000

Dividend= Net income * payout ratio = $50000*20%= $10000

Increase in retained earnings = Net income - Dividend = $(50000-10000)

                                                  = $40000

Increase in assets = $80000

External funds needed = $(80000-40000) = $40,000.

7 0
3 years ago
Smith Machining makes three products. The company’s annual budget includes $1,048,000 of overhead. In the past, the company allo
Flauer [41]

Answer:

The computation is shown below:

Explanation:

a. The company overhead rate based on direct labor is

= Total Overheads ÷ Direct Labor Hours

= $1,048,000 ÷ 40,000

= $26.2 per hour

b) Overheads Rate using Activity Based Costing  is

= Cost ÷ Activity level

For  Order Processing, it is

= $226,800 ÷ 14,000 orders

= $16.2 per order

For setups, it is

=  $157850 ÷ 4,100 setup

= $38.5 per setup

For Milling, it is  

= $395,850 ÷ 20,300 machine hours

= $19.5 per machine hour

For Shipping

= $267,500 ÷ 25,000

= $10.7 per shipment

We simply applied the above formula so that the per unit could come

6 0
3 years ago
When the activity level increases by 15%, net operating income in the flexible budget will ordinarily increase by?
schepotkina [342]

When the activity level increases by 15%, net operating income in the flexible budget will ordinarily increase by -more than 15% b/c fixed costs do not increase with changes in activity.

<h3>What is Net operating income?</h3>
  • Net income in business and accounting is an entity's revenue less costs, depreciation and amortization, interest, and taxes for a certain accounting period..

  • Net Operating Income, or NOI for short, exists a formula those in real estate use to quickly calculate the profitability of a particular investment. After deducting essential operational costs, NOI calculates the revenue and profitability of investment real estate property.

  • By deducting all annual expenses from income, the NOI formula determines how profitable a potential investment property is over the course of a single year.

  • After all costs have been deducted, operating profit displays a company's earnings, excluding the cost of debt, taxes, and some one-time expenses.

  • Net income, on the other hand, represents the profit remaining after all costs incurred in the period have been subtracted from revenue generated from sales.

Hence,  When the activity level increases by 15%, net operating income in the flexible budget will ordinarily increase by -more than 15% b/c fixed costs do not increase with changes in activity.

To learn more about Net operating income refer to:

brainly.com/question/15834358

#SPJ4

4 0
2 years ago
A customer asks you over the phone how much it will cost to upgrade memory on her desktop system to 16 GB. She is a capable Wind
tangare [24]

Answer:

She will be required to use the BIOS/UEFI to check the memory slots available and how much memory on the slots have been used up.

Explanation:

The reason why she'd be asked to perform the above task of checking which slots are avalable is so as to determine how much memeory will be bought to add to the existing one ad so as to be able to determine the price of the needed memory.

cheers.

7 0
3 years ago
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