Answer:
3.52 years
Explanation:
In the payback, we analyze in how many years the invested amount is recovered. The computation is shown below:
In year 0 = $1,100
In year 1 = $300
In year 2 = $310
In year 3 = $320
In year 4 = $330
In year 5 = $340
If we sum the first 3 year cash inflows than it would be $930
Now we deduct the $930 from the $1,100 , so the amount would be $170 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $320
So, the payback period equal to
= 3 years + ($170 ÷ $330)
= 3.52 years
In 3.52 years, the invested amount is recovered.
Answer and Explanation:
journal entry amount amount
cash A/c (500,000*$10) DR $5,000,000
common stock A/c (500,000*$1) $500,000
additional paid in excess of value A/c $4,500,000
(500,000*$9)
Answer:
$1,220.55
Explanation:
We use the Present value formula to find out the current price of the bonds. The calculation is presented on the excel spreadsheet
Given that,
Future value = $1,000
Rate of interest = 5.5%
NPER = 19 years
PMT = $1,000 × 7.4% = $74
The formula is shown below:
= -PV(Rate,NPER,PMT,FV,type)
So, after solving this, the current price of the bond is $1,220.55
Answer:
Date Account Title and Explanation Debit Credit
XXXX Cost of goods sold $5,800
To manufacturing overhead $5,800
(Entry for unapplied overhead transfer to cost of goods sold)
Answer:
See below for details.
Explanation:
To contract the money supply the the Fed can increase the discount rate. This shall increase the cost of borrowing and thus the demand for money should go down. Furthermore, people have more incentive to save as they are getting an increased return thus the overall money supply contracts.
The Fed can also sell short term US securities, this reduces the amount of excess reserves available to banks and restricts their ability to make loans thus contracting the money supply.
The Fed can also raise the reserve requirement which reduces the banks ability to lend loans and create money thus contracting the supply again.
To expand the money supply, The Fed can lower the reserve requirements, creating excess reserves for banks that can be loaned out and thus expand money supply.
The Fed can also buy short term securities for money thus increasing the supply of money in the economy.
Quantitative easing simply increases the money supply with additional currency issuing so this expands the supply.
Decreasing the discount ratios discourage people from saving and encourages borrowing thus creating an expanded supply for money via credit creation.
Hope that helps.
