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RUDIKE [14]
3 years ago
12

Currently, Glasgow Importers sells 280 units a month at a price of $729 a unit. The firm believes it can increase its sales by a

n additional 40 units if it switches to a net 30 credit policy. The monthly interest rate is 0.5 percent and the variable cost per unit is $480. What is the net present value of the proposed credit policy switch
Business
1 answer:
Natali [406]3 years ago
7 0

Answer:

$1,768,680

Explanation:

Given that:

  • Number of units: 280
  • Price per unit: $729
  • The monthly interest rate: 0.5 % = 0.005
  • Number of  additional units:  40
  • The variable cost per unit:  $480

The net present value of the proposed credit policy switch as the following formula:

NPV =  -[Number of units*price/unit) + (Number of  additional units*Variable cost/unit) + (price/unit - Variable cost/unit)*Number of  additional units] / Rate

NPV = - [($729*280) + ($480*40)] + [($729 - $480) 40]/0.005 = $1,768,680

Hope it will find you well.

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Answer and Explanation:

The Preparation of bank reconciliation for Cougar Corp. as of December 31 is shown below:-

                                         <u>Cougar Corp.</u>

                                    <u>Bank reconciliation</u>

                          <u>For the year ended December 31</u>

<u>Particulars                                                Amount</u>

Bank balance Dec 31                            $24,575

Add: Deposit in transit                            $2,500

Less:

Outstanding checks #302          ($180)

Outstanding checks #303          ($95)

Outstanding checks #304          ($25)     ($300)

Bank balance adjusted                             $26,775

Cash balance on 31 Dec                             $26,504

Add: EFT from customer             $1,700

Add: Interest income                   $21            $1,721

Less: Posting error

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Less: NSF check                            $500     $1,400

Book balance adjusted                               $26,775

Hence, the bank balance and the book balance are matched

8 0
2 years ago
Donatello files a suit against erasmus. before going to trial, the parties meet, with their attorneys to represent them, to try
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The answer to the question is a form of out of court dispute resolution called negotiation.

In legal context, negotiation occurs when one party contact the other party to try and work out a resolution or settlement that both parties can agree with. This option is the correct one because it does not involve a third party, which in other types of dispute resolution such as mediation and arbitration, must be present.

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3 years ago
The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and have a $1,000 face value. Cu
shtirl [24]

Answer: 6.5%

The yield to maturity is 6.496% (approximated to 6.5% to nearest tenth)

Explanation:

Using the formula (semi annually YTM)

YTM = C + (fv - pv) /t ÷ (fv + pv)/2

C= coupon rate = 7%(1000)= $70

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t = Time to maturity in years = 8years

C + (fv - pv) /t = 70 + (1000–1032)/8

= 70 – (32 /8) =66

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On September 1, Year 1, Gomez Company collected $9,000 in advance from a customer for services to be provided over a one-year pe
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Answer:

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