Answer:
Avoidable interest are $569,564.64
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<em>The answer and procedures of the exercise are attached in a microsoft excel document. </em>
Explanation:
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
The amount of interest capitalized in 2021 for the building using the specific interest method is $360000.
The first thing to do is to calculate the average cost of borrowing which will be:
= ($3200000 × 8%) + ($6400000 × 5%) / $9,600,000
= ($256000 + $320000) / $9600000
= $576000 / $9600000
= 0.06 = 6%
The average expenditure during the year will be:
= $9600000/2.
= $4800000
The capitalized Interest will be:
= 9% × $2400000
= $216000.
Then, the capitalized Interest for the borrowing will be:
= 6% × $2400000
= $144000
The total capitalized Interest will be:
= $216000 + $144000
= $360,000
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Answer: None of the above
Explanation: f the relative price of one unit of good y is 0.25 units of good z, it means that
Out of the given options none satisfy this condition, for
a.
b.
c.
Therefore, none of the above options satisfy the relative price equation.
Answer: Please see below for answer
Explanation:
Jones
Advertise NOT to advertise
Smith Advertise 8,8 12,6
NOT to advertise 6,12 10,10
To show that advertising is a dominant strategy.
Here if smith advertises, the best option is for Jones to advertise too since Jones will be getting a high pay off of $8million. when Smithy fails to advertise, the best option is for Jones to stll advertise sinvehe will be getting a higher payoff of $12 million. The dominant strategy is for Jones to advertise.
In the same vein, if Jones advertises, the best option for smith is to advertise too since he will get a high pay off same with ones at $8million. and if Johns fails to advertise, Smith should still advertise since he will be getting a higher pay off of $12million than $6million making the dominant strategy for smith to be in favor of advertisement.
This shows that advertising is a dominant strategy as a higher payoff is guaranteed.
b) If the government places a ban on cigarette ads, both firms will receive $10 million as neither of them will be able to advertise , than when both firms advertise with a pay off of $8million. The two firms should favor the ban as they will receive a higher payoff if both do not advertise.
Answer:
Profit = $42,000
Explanation:
Given:
House price = $350,000
Additional price = $5,000
Garage value = $25,000
Selling price = $450,000
Selling cost = $28,000
Total cost of the Assets
Purchase Home $350,000
Add: Additional Purchase $5,000
<u>Add: Purchase of Garage $25,000</u>
Total cost of the Assets $380,000
Profit = Sale Price - (Cost Price + Selling Cost)
Profit = $450,000 - ( $380,000 + $28,000)
Profit = $450,000 - $408,000
Profit = $42,000