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Natali [406]
3 years ago
5

Spinning Wheels Co. is considering renting a new bike shop. The landlord has offered a number of alternatives for paying the ren

t. The company's desired rate of return is 10%.The landlord offered a 3-year lease with the rent payments as follows: $8,000 at the end of the first year, $12,000 at the end of the second year, and $14,000 at the end of the third year. Using a spreadsheet or financial calculator, calculate the present value of the rent payments over the life of the lease.
Business
1 answer:
Vera_Pavlovna [14]3 years ago
4 0

Answer:

The present value of the rent payments over the life of the lease is  $27,708

Explanation:

Year 1: $8,000

Year 2: $12,000

Year 3: $14,000

Rate of return: 10%

Option 1:

The present value of the rent payments over the life of the lease can be calculated in excel in the formula of NPV

= NPV(Rate, Cash in year 1, cash in year 2, cash in year 3) = NPV(10%,8000,12000,14000) = $27,708

Option 2:

NPV of cash in Year 1 after 3 years = $8,000/(1+10%)^1 = $7,273

NPV of cash in Year 2 after 2 years = $12,000/(1+10%)^2 = $9,917

NPV of cash in Year 3 after 1 years = $14,000/(1+10%)^3 = $10,518

So total NPV of cash in 3 years = $7,273 +$9,917+$10,518

= $27,708

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The Tuck Shop began the current month with inventory costing $19,000, then purchased inventory at a cost of $52,950. The perpetu
DaniilM [7]

Answer:

Inventory shrinkage = $1,322

Explanation:

We know,

Inventory shrinkage = Ending inventory - Actual inventory at hand

Given,

Actual inventory at hand = $13,500

Ending inventory = Beginning inventory + Purchase - Inventory sold(Costing price)

Or, Ending inventory = $19,000 + $52,950 - $57,128

Or, Ending inventory = $71,950 - $57,128

Or, Ending inventory = $14,822

Therefore,

Inventory shrinkage = Ending inventory - Actual inventory at hand

Or, Inventory shrinkage = $14,822 - $13,500

Or, Inventory shrinkage = $1,322

5 0
3 years ago
The nominal exchange rate is .80 euros per U.S. dollar and a basket of goods in France costs 1,000 euros while the same basket c
lukranit [14]

Answer:

Australia has purchasing-power parity with the U.S.

Explanation:

A basket of goods costs $800 in the US. The same basket costs 1,000 euros in France and 960 Australian dollars in Australia.  

The nominal exchange rate for euros is .80 euros per U.S. dollar and for Australian dollars, it is 1.2 Australian dollars per U.S. dollar.  

The purchasing power parity theory compares the currency of two countries through a basket of goods. The currency of the two countries is in equilibrium or is at par if a basket of goods cost the same in both the countries.  

This method compares the economic productivity and standard of living in two countries.  

Converting the value of basket in France into US dollars,

= \frac{1,000}{0.80}

= $1,250  

Converting the value of basket in Australia into US dollars,

= \frac{960}{1.2}

= $800

The cost of the basket of goods is same in Australia. This indicates that Australia has purchasing-power parity with the U.S.

3 0
3 years ago
Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual i
White raven [17]

Answer and Explanation:

The journal entries are shown below:

1. Merchandise Inventory $1,620

        To Accounts Payable $1,620

(Being the calculators purchased on account)

2. Merchandise Inventory $50

              To Cash $50

(Being freight expenses paid for cash)

3. Accounts Payable $38

          To Merchandise Inventory $38

(being the returned inventory is recorded)

4. Accounts Receivable $690

          To  Sales Revenues $690

(Being the sales is recorded)

Cost of Goods Sold $520

     To Merchandise Inventory $520

(Being the cost is recorded)

5. Sales returns $45

       To Accounts Receivable $45

(being the sales return is recorded)

Merchandise Inventory $34

    To Cost of Goods Sold $34

(Being the cost of returned is recorded)

6. Accounts Receivable $760

     To Sales Revenues $760

(being the sale is recorded)

Cost of Goods Sold $570

   To Merchandise Inventory $570

(Being the cost is recorded)

4 0
2 years ago
Manuel operates equipment that moves natural gas through pipelines. Manuel is a Gas Compressor. Pipefitter. Power Dispatcher. Su
klemol [59]

Answer:

Gas Compressor Operator

Explanation:

A gas compressor operator works with steam or internal combustion engines to compress and transmit gases through pipelines.

He or she directs various control nodes and adjust valves in the compressor engines, pumps, and other related equipment. They monitor pressure, temperature gauges, and other safety components to ensure the safe passage of gases in the pipelines.

4 0
2 years ago
Read 2 more answers
The following information is available for Bandera Manufacturing Company for the month ending January 31:
elena-14-01-66 [18.8K]

Answer:

Answer: Cost of goods sold, gross profit and net income

Explanation:

Bandera Manufacturing Company

Cost of Goods Sold

Jan-31  

Finished Goods Inventory, January 1 73590

Add: Cost of Goods Manufactured 306090

Total Goods Available for Sales 379680

Less: Finished Goods Inventory, January 31 67080

Cost of Goods Sold 312600

b)  

Bandera Manufacturing Company

Gross Profit

Jan-31

Sales 651250

Less: Cost of Goods Sold 312600

Gross Profit 338650

c)  

Bandera Manufacturing Company

Net Income

Jan-31

Gross Profit  338650

Operating Expenses:  

Selling expenses 102250  

Administrative expenses 54050  

Less: Total Operating Expense  156300

Net Income  182350

2)  

a)  

Digital Vibe Manufacturing Company

Income Statement

For the Month Ended January 31

Sales  232300

Less: Cost of goods sold  103400

Gross profit  128900

Less: Operating expense  

Selling expense 59400  

Administrative expense 26100  

Total operating expense  85500

Net income  43400

b)  

Particulars Amount ($)

Materials purchased 48300

Less: Materials used for production 37200

Ending balance of materials 11100

Particulars Amount ($)

Materials used for production 37200

Add: Direct labor wages 55500

Add: Factory overhead 78200

Total cost of manufacturing 170900

Less: Transferred to finished goods 129900

Ending balance of work-in-process 41000

Particulars Amount ($)

Transfer from work-in-process 129900

Less: Cost of goods sold 103400

Ending balance of finished goods 26500

4 0
3 years ago
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