All categories

3 years ago

__________ would use the present value of an annuity due for which of the following transactions?

Business

1 answer:

zysi [14]3 years ago

3 0

Answer:

A and D

Explanation:

If a periodic sum is to be paid or received, an annuity must be used since this means a series of uniform payments, therefore in addition to this and the time an interest rate is required to find the present value of the payments you must use in excel PV (present value) function and you need aside these data an interest rate.

You might be interested in

3)You have won a contest and are allowed to choose between two prizes. One option is to receive$200 today and another $200 one y

vekshin1

Answer:

C)25 percent

Explanation:

Present value is the sum of discounted cash flows.

The interest rate where the present value of the two two prizes would be identical can be found using a financial calculator and trial and error method.

Option A :

Cash flow for year zero = $200

Cash flow for year one = $200

Present value when I is 0 = $400

Present value when I is 5 = $390.48

Present value when I is 10 = $381.82

Present value when I is 25 = $360

Option B

Cash flow in year 0 =$100

Cash flow in year 1 = $325

Present value when I is 0 = $425

Present value when I is 5 = $409.52

Present value when I is 25 = $360

Present value when I is 10 = $395.45

It can be seen that it's at 25% that both cash flows would be equal.

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

8 0

3 years ago

Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $18.50 per unit, and the variable labor

Pavel [41]

Answer:

a. $25.50

b. $9,725,000

c. Cash = 8,888.89 units

Accounting = 35,555.56 units

Explanation:

a. Variable cost per unit = material cost + labor cost = $18.50 + $7.00 = $25.50

b. Total cost = Fixed + Variable

Variable = $25.50 $\times$ 350,000 = $8,925,000

Fixed = $800,000

Total = $800,000 + $8,925,000 = $9,725,000.00

c. Cash break even point = (Fixed cost - Depreciation)/Contribution per unit

Fixed cost = $800,000

Depreciation = $600,000

Contribution per unit = $48 (Selling price) - $25.50 (Variable cost) = $22.5

Cash Break even point = ($800,000 - $600,000)/$22.5 = 8,888.89 units

Accounting Break Even Point = Total fixed cost/ Contribution per unit

=$800,000/$22.5 = 35,555.56 units

Final Answer

a. $25.50

b. $9,725,000

c. Cash = 8,888.89 units

Accounting = 35,555.56 units

5 0

3 years ago

Perfect Printers is able to obtain 30 days credit terms to purchase a heavy duty printing machine for $200,000. How will this pu

12345 [234]

Answer:

How will this purchase impact the accounting equation of Perfect Printers at the time of the purchase?

An increase in the assets by $200,000 and a similar increase in liability by $200,000

Explanation:

The accounting equation is the foundation for the double enter system of account balancing. In this system, the amount of debits are entered on one side as the corresponding credit is entered on the other side. Then the total credits are added and compared to the sum of the debit. When the credit equals the debit, the accounts balance. The accounting equation can be expressed as;

A=L+E

where;

A=assets

L=liabilities

E=owner's equity

Lets enter the transaction as shown;

Account type Asset Liability

Printing machine $200,000

Cash $200,000

Total $200,000 $200,000

An increase in the assets by $200,000 and a similar increase in liability by $200,000

8 0

3 years ago

True or false: the term economic investment includes purchasing stocks, bonds, and real estate.

Lapatulllka [165]

False because it doesnt invest the stocks

6 0

3 years ago

Mill Co.'s trial balance included the following account balances at December 31, Year 6:

o-na [289]

Answer:

D) $45,000

Explanation:

The computation of the amount which is included in the current liability section is shown below:

= Account payable balance + bonds payable - discount on bonds payable + dividend payable

= $15,000 + $25,000 - $3,000 + $8,000

= $45,000

The current liability is that liability which is arise for one year. Since, the notes payable is a long term liabilities so we do not consider in the computation part.

4 0

3 years ago