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MAVERICK [17]
3 years ago
7

Greenfield, Inc. agrees to make lease payments of $220 at the end of each month for 48 months for the use of a machine. Assuming

a borrowing rate of 12%, the present value of the lease payments is:
Business
1 answer:
Anna35 [415]3 years ago
8 0

Answer:

The Present value of the lease payment is  $ 6,713.28

Explanation:

Given as :

The payment amount at the end of every months = $ 220

The total months = 48 months , i.e 4 years

The rate of compounded yearly = 12 %

Let The present principal value =  P

∵ $ 220 is the payment at the end of 48 months

∴ Total amount in 48 months = $ 220 × 48 = $ 10,560

Now , <u>from compounded method</u>

The Amount after 48 months = Present value × (1+\frac{\textrm Rate}{100})^{\textrm Time}

So , $ 10,560 = P × (1+\frac{\textrm 12}{100})^{\textrm 4}

Or,  $ 10,560 = P × (1.12)^{4}

So , $ 10,560 = P × 1.573

∴ P = \frac{10560}{1.573} = $ 6,713.28

Hence The Present value of the lease payment is  $ 6,713.28  Answer

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m_a_m_a [10]

Answer:

A weaker dollar benefits EXPORTERS and hurts IMPORTERS.

Explanation:

A weaker dollar means that the dollar depreciated against foreign currencies, meaning that you need more dollars to purchase foreign currencies. This results in higher prices for imported goods. On the other hand, a weaker dollar helps exporters because it lowers the price of US products sold to foreign countries. As exports grow and imports decrease, the dollar starts to appreciate again.

8 0
3 years ago
At the present time, Andalusian Limited (AL) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. The
JulijaS [17]

Answer:

After tax cost of debt is 6.45%

Explanation:

In computing the after tax cost of debt, the starting point would be to ascertain the pre-tax cost of debt-yield to maturity-before applying the tax.

The yield to maturity can be calculated using the rate formula in excel ,given as :=rate( nper,pmt,-pv,fv)

nper is the nuer of coupon interest the bond would pay which is 20

pmt is the annual payment of the bond which is 13%*$1000=$130

pv is the current price of the bond $1,181.96

fv is the face value of the bond which is $1000

=rate(20,130,-1181.96,1000)

rate=10.75%

Pretax cost of debt is 10.75%

After tax cost of debt=pretax cost of debt*(1-tax rate)

tax rate is 40%=0.4

                                  =10.75%*(1-0.4)

                                   =6.45%

7 0
3 years ago
In mid-2010, Hewlett-Packard Company (HP) acquired Palm Computing Inc., a manufacturer of personal devices and smartphones. Befo
Lelechka [254]

Answer:A. Define the business mission

Explanation: Define the Business mission is the processes involved in tying to understand a given business,it helps to know the aims and objectives,the present situation and the impact a given business has.

In the case of Hewlett-Packard Company (HP) acquired Palm Computing Inc., HP will try to know how Palm computing has fared through the years and what impact will it have on his own business objectives when it is fully acquired.

6 0
3 years ago
The 2018 income statement of Adrian Express reports sales of $20,510,000, cost of goods sold of $12,550,000, and net income of $
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Answer:

1. Gross profit ratio= Gross Profit/ Sales *100    

-Sales $ 20510,000      

-Gross Profit = Sales - Cost of Goods Sold  =20,510,000 - 12,550,000 = 7,960,000  

Gross Profit Ratio= 7,960,000 / 20,510,000 * 100

= 38.81%

2.Return on Assets= Net income after tax / Average Total assets  

Where Average Total assets= (9,800,000+8,160,000) / 2= 8,980,000

Where Net income after tax= 1,940,000

Return on Assets = 1,940,000 / 8,980,000 * 100 = 21.60%

3.Profit Margin= Net income/ Sales *100    

=1,940,000 /20,510,000 *100

= 9.46%    

4. Total Assets turnover= Sales / Average assets    

=20,510,000 / 8,980,000

=2.28 times  

5 Return on Equity: Net income after tax/ Average stockholder's equity  

Where Average Stockholder's equity: (2,050,000 +3,190,000 + 1990000 + 1766000) / 2 = $4498,000

Return on Equity: 1940000/4498,000 *100

= 43.13%

7 0
3 years ago
If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are.
BigorU [14]

FOB shipping point

Explanation:

FOB affects the buyer's inventory cost adding liability for shipped goods increases inventory costs and reduce net income.

3 0
1 year ago
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