Answer:
Debit Advertising expense $916.67
Credit Prepaid Advertising $916.67
Being entries to recognize advertising expense incurred for 5 months.
Explanation:
When an amount is paid in advance, the entries posted are
Debit Prepaid Advertising
Credit Cash account (with the amount prepaid)
As the expense is incurred, entries required would be
Debit Advertising expense
Credit Prepaid Advertising (with the amount incurred)
Expense incurred in 5 months
= 5/6 × $1100
= $916.67
Hence the entries required will be
Debit Advertising expense $916.67
Credit Prepaid Advertising $916.67
Being entries to recognize advertising expense incurred for 5 months.
Answer:
opportunity cost is define as given below
Explanation:
- Opportunity cost can be defined as sacrifice for the individual, company or government. The opportunity cost of obtaining products or services is a forgiving option. For a person who aims to maximize his benefit from his limited available resources, he must allocate these limited resources to those who are most important. Opportunity Costing helps a person make good use of their scarce resources. .
- Opportunity cost is also important for a company because the company has to allocate its limited available raw materials to produce a certain product with high demand at the expense of other products that are less demanding.
The commodity is an inferior good.
An inferior good is one for which the quantity demanded decreases when the income of the consumer increases, or one for which the quantity demanded increases when the income of the consumer decreases. In contrast, a normal good is one for which the demand increases when the consumer's income increases.
Answer:
The answer is 30%
Explanation:
Solution
Given that:
Project A
Project A costs = $350
Cash flows =$250 and $250 (next 2 years)
Project B
Project B costs =$300
Cash flow = $300 and $100
Now what is the crossover rate for these projects.
Thus
Year Project A Project B A-B B-A
0 -350 -300 -50 50
1 250 300 -50 50
2 250 100 150 -150
IRR 27% 26% 30% 30%
So,
CF = CF1/(1+r)^1 + CF2/(1+r)^2
$-50 = $-50/(1+r)^1 + $150/(1+r)^2
r = 30%
CF = CF1/(1+r)^1 + CF2/(1+r)^2
$50 = $50/(1+r)^1 + $-150/(1+r)^2
r = 30%
Hence, the cross over rate for these project is 30%
Note:
IRR =Internal rate of return
CF =Cash flow
r = rate