All categories

4 years ago

If the nominal annual interest rate is 12% compounded quarterly, what is the effective annual interest rate?

Business

1 answer:

irina1246 [14]4 years ago

5 0

Answer:

the effective annual interest rate is 12.55 %

Explanation:

The computation of the effective annual interest rate is shown below:

Effective annual interest rate is calculated by using the following formula

= {(1 + interest ÷ number of compounding period)^number of compounding period} - 1

= (1 + .12 ÷ 4)^4-1

= (1.03)^4 - 1

r = 1.1255 - 1

r=.1255

hence, the effective annual interest rate is 12.55 %

You might be interested in

Joachim is the sales manager of a large car dealership. He wants to increase sales significantly over the next 12 months, and he

Anastasy [175]

Answer:

making business Strategy

Explanation:

As he and his staff has already planned out what they have to sell . He is now making a business strategy to implement. Business strategy is developed to achieve the desired results within the required time and with the given opportunities or circumstances. In other words it is a master plan set out to get the required results within a specific environment with specific alternatives.

5 0

3 years ago

Cline Manufacturing Company uses a job order system and maintains perpetual inventory records.

Vesna [10]

Answer:

1. Raw materials were purchased on account.

Debit Raw Materials Inventory.

Credit Accounts Payable.

Inventory was bought in credit so Payable is owed.

2. Issued a check to Dixon Machine Shop for repair work on factory equipment.

Debit Manufacturing Overhead

Credit Cash

Cash was used to pay for Indirect production work. Cash reduces Sonia credited.

3. Direct materials were requisitioned for Job 280.

Debit Work in Progress Inventory

Credit Raw Material Inventory

Transferred from Raw Materials so work may be done.

4. Factory labor was paid as incurred.

Debit Factory Labor

Credit Cash

Cash reduces again so is credited. Factory Labor is Expense that should be debited.

5. Recognized direct labor and indirect labor used.

Debit Work in Progress Inventory

Debit Manufacturing Overhead

Credit Factory Labor

Direct Labor falls under Work in Progress and Indirect Labor falls under Manufacturing Overhead.

6. The production department requisitioned indirect materials for use in the factory.

Debit Manufacturing Overhead

Credit Raw Materials Inventory

Indirect materials are an overhead.

7. Overhead was applied to production based on a predetermined overhead rate of $8 per labor hour.

Debit Work in Progress Inventory

Credit Manufacturing Overhead

8. Goods that were completed were transferred to finished goods.

Debit Finished Goods

Credit Work in Progress Inventory

9. Goods costing $80,000 were sold for $105,000 on account.

Debit Cost of Goods Sold

Credit Inventory

Then,

Debit Accounts Receivable

Credit Sales

10. Paid for raw materials purchased previously on account.

Debit Accounts Payable

Credit Cash

8 0

3 years ago

A trial balance is prepared to:

Nikolay [14]

Answer:

d.discover errors that affect the equality of debits and credits.

Explanation:

Trial balance : In trial balance, there are two columns namely debit columns and credit columns. The total of debit and credit columns should always be matched.

The debit columns record assets and expenses side whereas, the credit column record revenue, stockholder equity, and the liability side. It shows the error through which the debit side and the credit side would be affected.

3 0

3 years ago

Altoona Corporation has two divisions, Hinges and Doors, which are both organized as profit centers; the Hinge Division produces

alukav5142 [94]

Answer:

d. $864,000 decrease in profits.

Explanation:

Hinge Division's total cost per unit:

variable $26

fixed $17

total $43

sales price $58

contribution margin $32

profit margin $15

Alternative A Alternative B Differential

intercompany outside amount

money paid to $0 $1,696,000 ($1,696,000)

outside vendor

variable costs $832,000 $0 $832,000

fixed costs $544,000 $544,000 $0

total costs $1,376,000 $2,240,000 ($864,000)

If the hinges are purchased form an outside vendor, the corporation's total profits will decrease by $864,000.

3 0

3 years ago

Firefly Inc. sold land for $225,000 cash. The land had been purchased five years earlier for $275,000. The loss on the sale was

baherus [9]

Answer:

It will report 225,000

Explanation:

In the cash flow statment we focus on the cash received or used during the year. This is regardless of the gain or loss. When it was adquire the cash flow show use of cash for 75,000. Now, the land is sold. The company receive 225,000 cash. This amount is posted in the cash flow statement, as cash generated for investing activities.

Resuming:

On cash flow, you have to follow the money, not the gain or loss. If there is no cash receipt or disbursement, then you will not post anything.

8 0

3 years ago