Answer:
<u>If a project has a payback period that is shorter than the one desired by the company, accept the project.</u>
Explanation:
<u>Capital budgeting decision rule:</u> The term "capital budgeting decision rule" is determined as a process to invest or finance if the "NPV > 0, if the IRR > r, or if the PI > 1.0". However, there are no specific rules that are being set for the "payback period", "AAR", and "discounted payback period" due to the fact that they do not always "sound measures".
<u>In other words, </u>it is described as a specific firm's decision to finance its ongoing funds, mostly for longer time assets in relation with the "expected flow" of the benefits during a time period or over years.
Answer:
Interest received is $5.020
Wages paid is $13,400
Explanation:
The task is compute cash for interest for Case A and cash paid as wages for Case B in the year:
Computation of cash for interest:
interest revenue $6,600
opening interest receivable $920
closing interest receivable ($2,500)
Cash received $5,020
The closing balance was deducted because it a part of interest revenue for current year whose cash inflow is yet to be received and the opening interest receivable was added because the related cash would have been received during year.
Wages expense $12,200
wages payable (opening balance) $5,400
wages payable (closing balance) ($4200)
wages paid $13,400
The $5,400 was wages owed last year paid this year and the $4,200 is the wages owed this year expected to paid next year.
Answer:
Explanation:
From an economist perspective, the demand and supply model predict that when there is an increase in demand (more people demand more gasoline because of the heavy tourist traffic) prices will increase, but the equilibrium quantity (quantity supplied, and quantity demand are equal) increases too. In the demand and supply graph, an increase in demand shifts the demand curve to the right (the graph attached shows that price changes from p1 to p2 and quantity changes from q1 to q2). Then, the economist perspective differs from the tourist perspective because prices do not rice because companies use excuses to "jack up" them, they rice because of the demand and supply model predicts it.