Answer: 0 years
Explanation:
The payback period calculates the amount of time taken to recoup the initial investment made in a project or in the purchase of a machine or building. It calculates how long the cumulative cash flow generated from a project equals the cost of the project.
The payback period for both machines are zero years because the cumulative cash flow is less than the cost of the machine.
For machine A - cumulative cash flow- $-47,000 is less than -$71,000
For machine B - cumulative cash flow, -$7,000 is less than -$52,000
Explanations on how the figures were derived is found in the attached tables.
Answer:
Check the following explanation.
Explanation:
Corporation has no accumulated E & P at the time of the distribution. The shareholder has a taxable dividend equal to the current E & P determined at year-end, which was $40,000. The balance of the distribution,$20,000, reduces the shareholder’s basis in the stock, and any excess over basis results in capital gain.
Answer:
a. Due to increases in hay prices, an input for raising cattle, the price of a gallon of 2% milk increases from $2.98 to $3.25. QUANTITY DEMANDED DECREASES, as the price of a good or service increases, the quantity demanded decreases.
b. Groupon has a Groupon for $6 off the price of laser tag. QUANTITY DEMANDED INCREASES, as the price of a good or service decreases, the quantity demanded increases.
c. Sharp increase in the price of wood causes increases in prices for dressers and desks. QUANTITY DEMANDED DECREASES, if the price of a key input increases, the production costs will increase, resulting in a higher selling price ⇒ lower quantity demanded.
d. Week long special at the grocery store, where pork shoulder is on sale at $1.99 a pound, down from $3.99 a pound. QUANTITY DEMANDED INCREASES, as the price of a good or service decreases, the quantity demanded increases.
e. Buy one get one free special for MP3 albums on Amazon. QUANTITY DEMANDED INCREASES, the buy one get one free promotion lowers the price of a good or service, resulting in higher quantity demanded.
Answer:
Price of the bond is $1,757
Explanation:
Coupon payment = 2000 x 6.4% = $128 annually
Number of periods = n = 20 years
Yield to maturity = 7.6% annually
Price of bond is the present value of future cash flows, to calculate Price of the bond use following formula
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Price of the Bond = $128 x [ ( 1 - ( 1 + 7.6% )^-20 ) / 7.6% ] + [ 2,000 / ( 1 + 7.6% )^20 ]
Price of the Bond = $128 x [ ( 1 - ( 1.076 )^-20 ) / 0.076 ] + [ 2,000 / ( 1.076 )^20 ]
Price of the Bond = $1295.03 + $462.15
Price of the Bond = $1,757.18
