Answer: $329.75
Explanation:
The one year subscription is $40 per year. It is estimated that the average age of current subscribers is 38 and they will leave on average to 78. This means that they will leave for,
= 78 - 38
= 40 years
Evans Ltd average interest rate on long-term debt is 12% so this means that we can use that 12% as a discount rate for the cash-flow expected.
I have attached a Present Value Interest Factor of an Annuity table to this question. It helps calculate annuities faster.
The above can be treated as an annuity because the $40 is constant every year.
The present value of the $40 over 40 years can be calculated by,
= $40 * present value Interest Factor of an Annuity for 40 years at 12% (look at the table for where 40 years on the y axis intersects with 12% on the x axis)
= $40 * 8.2438 (this is the figure when it is not rounded off to 3 dp)
= $329.752
= $329.75
This shows that the lifetime flat fee of $480 is more profitable for Evans Ltd as opposed to the yearly subscription. They should therefore try to sell more of the lifetime contract with the flat fee.
Answer:
The answer is that the net income under absorption costing would be higher than the net income under variable costing.
Explanation:
Absorption costing and variable costing are terms used in accounting contexts. Absorption costing, also known as full costing, incurs overhead costs when the product is sold; not before it. Variable costing, also referred to as direct costing, would include overhead costs during the period the costs occurred. In this condition, net income would be higher using absorption since overhead costs would not be included until the product is sold.
Answer:
The c orrect answer is A.
Explanation:
Giving the following information:
Annual deposit= 1,410
Annual interest rate= 5%
Number of years= 8 years
To calculate the future value of her investment, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {1,410*[(1.05^8)-1]}/ 0.05
FV= $13,464.24
Answer:
$19,380
Explanation:
The computation of the net sales for the two months is shown below:
= Sale value of merchandise as on July 12 + Sale value of merchandise as on June 15 + Sale value of merchandise as on July 20 - sales discounts from July 15 sale
= $3,500 + $10,500 + $5,800 - $10,500 × 4%
= $3,500 + $10,500 + $5,800 - $420
= $19,380
Since the payment is collected on June 23 i.e within 10 days so it is eligible for sales discounts
And from July 20 sale no sales discounts is eligible as it is exceeded than 10 days
Answer:
Option b (Substitution.....services) is the appropriate choice.
Explanation:
- The above leads to calculating difficulties as well as the failure throughout the Index to identify better products and services contributing to less precise inflation outcomes.
- It does not take account of the replacement facilities, which arise when an increase throughout the price of one promising recommendation to a replacement including its good by another, which often increases the costs of one quality.
The other options are not related to the given scenario. So the above is the correct choice.
