Based on the percentage of the receivables that go to the allowance account and the accounts receivable balance, the bad debt expense is $24,000.
<h3 /><h3>How can the bad debt expense be found?</h3>
This is found as:
= (Accounts receivable balance x Percentage of receivables ) + (Amount written off - Credit balance on allowance account)
Solving gives:
= (300,000 x 8%) + (25,000 - 21,000)
= 24,000 + 4,000
= $28,000
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Answer:
the correct answer is "Ongoing relationship".
Explanation:
there are several types of supplier relationships such as,
- Buy the market
- ongoing relationship
- partnership
- strategic alliance
- back ward integration
ongoing relationship is when the suppliers do business with both our business and other buyers/competitors. the size of contracts are medium to large and there is a good connection between our business and our suppliers.
Answer:
a. How much will you have in your retirement account on the day you retire?
- future value of the annuity = annual payment x (FV annuity factor, 11%, 40 periods) = $5,000 x 581.826 = $2,909,130
b. If, instead of investing $5,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be?
- present value = future value / (1 + interest rate)ⁿ = $2,909,130 / 1.11⁴¹ = $40,320.04
c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 28th withdrawal (assume your savings will continue to earn 11.0% in retirement)?
- payment = present value / annuity factor (PV annuity factor, 11%, 28 years) = $2,909,130 / 8.60162 = $338,207.22
d. If, instead, you decide to withdraw $647,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take until you exhaust your savings?
- We can first try to get an approximate answer. The annuity factor = $2,909,130 / $647,000 = 4.49633694. Now looking at an annuity table we can look at the closest amount for 11%. The answer is between 6 years (annuity factor 4.2305) and 7 years (annuity factor 4.7122). This means that in less than 7 years you will have no more money left.
e. Assuming the most you can afford to save is $ 1 comma 000$1,000 per year, but you want to retire with $1,000,000 in your investment account, how high of a return do you need to earn on your investments?
- Again we must use the future value to determine the annuity factor. Annuity factor = $1,000,000 / $1,000 = 1,000. Using an annuity calculator to determine the closest rate (for 40 periods) = 12.9515% ≈ 12.95%
Answer:
P14 = $55.69545045394 rounded off to $55.70
Explanation:
The constant growth model of dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under constant growth DDM is,
P0 = D1 / (r - g)
Where,
- D1 is the dividend expected in Year 1 or next year
- g is the constant growth rate in dividends
- r is the discount rate or required rate of return
To calculate the price of the share today, we use the dividend that is expected next year or in Year 1. Thus, to calculate the price of the share 14 years from now, we use use D15. The D15 can be calculated as follows,
D15 = D1 * (1+g)^14
D15 = 0.50 * (1+0.09)^14
D15 = $1.67086351362 rounded off to $1.67
Now using the equation for Price as provided by the DDM model,
P14 = 1.67086351362 / (0.12 - 0.09)
P14 = $55.69545045394 rounded off to $55.70