Answer:
Correct option is (D)
Explanation:
One of the principles of money and banking is that time has value. Money worth today is not the same as it is worth tomorrow. For the same reason, money received today has more value than received tomorrow as the same could be invested elsewhere.
This is the reason why interest is charged on money paid later to compensate for the opportunity lost to invest elsewhere. As such, if car is obtained on loan, the installment paid includes the interest levied on loan. This is the reason that sum of installments are higher than the purchase price.
Answer:
$9.00
Explanation:
Note: See the attached file for the calculation of PV of year 1 to 7 dividends.
Price at year 7 = year 8 dividend / (Rate of return - Perpetual growth rate) = (0.5747245056 * 1.05) / (10% - 5%) = $12.0692146176
PV of price at year 7 = $12.0692146176 / (1.10)^7 = $6.19341546169015
Current price = Sum of PV of years 1 to 7 dividends + PV of price at year 7 = $2.81096656749202 + $6.19341546169015 = $9.00
Well if you want to know that you have to do this:
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Margin per chair = $80
Machine hours to produce 1 chair = 2 hours
Multiply: 80 x 2 = 160
Deluxe Chair: 160
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Margin per chair = $90
Machine hours to produce 1 chair = 4 hours
Multiply: 90 x 4 = 320
Executive Chair: 320
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Contribution Margin: $90 and $80
Add: 90 + 80 = 170
Contribution Margin: $170
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Machine Hours: 2 and 4
Add: 2 + 4 = 6
Machine Hours: 6 hours
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So, their is $170 contribution margin per 6 hours.
Hope this helps XD
Answer:
The journal entry for the cash receipt and on that the sales tax is charged is as follows:
Explanation:
Cash A/c................................Dr $8,640
To Sales A/c.............................Cr $8,000
To Sales Tax Payable A/c.....Cr $ 640
Working Note:
Sales Tax Payable = Amount of cash sales × Rate of Sales Tax
= $8,000 × 8%
= $640
So, the total of cash received will be = Sales Amount + Amount of sales tax payable
= $8,000 + $640
= $8,640
Here is the answer choice to the question
a. the real rate of interest on your loan is 14%.
b. the real rate of interest on your loan was previously 10% and is now 35%.
c. the real rate of interest on your loan is now –2%.
d. you will pay the lender back exactly $9,500.
e. you will pay the lender back exactly $10,700
Answer:
C. the real interest rate on your loan is now -2%
Explanation:
The real interest rate of can be gotten by subtracting the nominal interest rate from the inflation rate from nominal interest rate
Inflation rate = 7%
Nominal interest rate= 5%
= 5 percent - 7 percent
= -2%
The real interest rate can be defined as the rate of interest an investor, saver or lender is going to receive after they have allowed for inflation.
