Answer:
The correct answer is E
Explanation:
The interest rate is defined as the rate of percentage which is charged on the loan or which is paid on the savings. It is the reward for lending as well as the cost of borrowing.
When the interest rate rises or increases, then everyone tend to borrow more amount of money and the high demand of the credit states that the people are willing to pay more for the same.
So, the situation which would increase the interest rate in the economy is when the corporations set up for the expansion plans and increase the demand for the capital.
Answer:
the investment with large cash flow early
Explanation:
This can be illustrated with an example.
There are 2 investments A and B
The cash flows of A =
Cash flow in year 1 = $50,000
Cash flow in year 2 = 0
Cash flow in year 3 = 0
The cash flows of B =
Cash flow in year 1 = 0
Cash flow in year 2 = 0
Cash flow in year 3 = 50,000
Discount rate for both investment is 40%
Present value of A = $35,714.29
Pesent value for B = $18,221.57
It can be seen that the investment with the higher cash flow early has a higher present value
Answer:
$2,500
Explanation:
Bad debt Expense will be calculated using the percentage of debt loss. The expense will be calculated using the account receivable balance.
Estimated allowance for doubtful accounts = Credit Sales x percentage = $300,000 x 1% = $3,000
Current Balance = $500 credit
As Allowance for Doubtful Accounts already have credit balance of $500, we need to adjust the remainder to make the closing balance of Allowance for Doubtful Accounts $3,000 at the year end.
Adjustment Value = $3,000 - $500 = $2,500
To calculate:
1) Net income (loss) for 2010.
2) Operating cash flow
Solution: 1)
Sales = $850000
Less: Cost of goods sold = $610000
Gross profit = $240000
Less: Administrative and selling expenses = $110000
Earning before Interest, Tax and Depreciation = $130000
Less: Depreciation = $140000
Earning before Interest and Tax (EBIT) = ($10000)
Less: Interest expense = $85000
Earning before tax (EBT) = ($95000)
Less: Tax = $0 (as company is having negative EBT or loss hence no tax)
Net loss = $95000
2) Operating cash flow
EBIT + Depreciation - Tax
Wherein, EBIT = Earning before Interest and Tax
($10000) + 140000 - 0 = $130000
Answer:
Consider the following explanation
Explanation:
Foreign tax credit allowable is the minimum of Federal Income Tax and Income tax paid in foreign country. Here, Jimenez had paid 40% (2,000,000/5,000,000) income tax in foreign country. So. Jimenez will only be eligible to take foreign tax credit of 1,050,000 i.e. 5,000,000 * 21% and there will be carryover of $950,000 (2,000,000 - 1,050,000) foreign taxes.
There is carryover tax when we cannot use the whole amount of foreign tax credit in the current year and the balance foreign tax is carried over to future years.
