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Answer:
Determine the net cash flows for the first year of the project:
- $90,816 - $167,600 = -$76,784
Determine the net cash flows for years 2 - 9 of the project:
Determine the net cash flows for year 10 of the project:
- $90,816 + $12,800 = $130,616
Explanation:
additional sales 8,600 units at $46 each = $395,600
required investment $167,600
10 year useful life and $12,800 residual value
selling expenses 4% of total revenue
manufacturing costs per unit:
- Direct labor $8
- Direct materials $22
- Fixed factory depreciation $8.40
- Variable factory overhead $3.60
- Total $42.00
net cash flows:
total revenue $395,600
direct materials -$189,200
direct labor -$68,800
variable overhead -$30,960
selling expenses -$15,824
net cash flow = $90,816
Answer:
The correct answer is letter "A": Finished goods inventory.
Explanation:
Finished goods inventory refers to those products that have reached their maximum level of completion and are stored in the manufacturing company inventory waiting for retailers or end-consumers to demand them. Finished goods are also called <em>final goods</em>.
Answer:
The answer is option D
Explanation:
The bond can be issued at par, at a discount or at a premium depending on the coupon rate and the market interest. The price of the bond which pays semi annual coupon can be calculated using the formula of bond price. The formula to calculate the price of the bond is attached.
First we need to determine the semi annual coupon payment, periods and YTM.
Semi annual coupon payments = 2000000 * 0.1 * 6/12 = 100000
Semi annual periods = 5 * 2 = 10
Semi annual YTM = 0.08 * 6/12 = 0.04
Bond Price = 100000 * [(1 - (1+0.04)^-10) / 0.04] + 2000000 / (1+0.04)^10
Bond Price = $2162217.916
The price of the bond is thus $2162290 approx. The difference in answers is due to rounding off.