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soldi70 [24.7K]
3 years ago
11

Chloe Closson paid for her vacation to the mountains with a $3,000 installment loan at 10% for 12 months. Her monthly payments w

ere $263.75. After five payments, the balance due was $1,786.20. If Chloe pays off the loan with the sixth payment, how much will she save?
Business
1 answer:
erastova [34]3 years ago
7 0
If Chloe did not pay off the loan, she will payout 263.75 x 12 = $3165.00 

However, if Chloe pays off the loan with the sixth payment, she will pay out (263.75 x 5) + 1,786.20 = $3,086.95.

But the question is how much will she save? To get the answer just follow this:  3165.00 - 3086.95 = $78.05 

Therefore, Chloe saves $78.05 
You might be interested in
You purchased a new smart-phone. The cost to you is $39.95 per month for 2 years. Warranty coverage is $12.99 per month. What is
Kobotan [32]

Answer:

The total cost of the phone is $1,270.56

Explanation:

The total cost of the phone is computed as:

Total cost = Cost of phone for 2 years + Cost of warranty coverage for 2 years

where

Firstly, the cost of phone for 2 years is computed as:

Cost of phone =( For first year) Per month Cost × 12 months  +( For second year ) Per month Cost × 12 months

= $39.95 × 12 + $39.95 × 12

= $ 479.4 + $479.4

=$958.8

Then, the Cost of warranty coverage for 2 years is computed as:

Cost of warranty = ( For first year) Per month Cost × 12 months  +( For second year ) Per month Cost × 12 months

= $12.99 × 12 + $12.99 × 12

= 155.88 + $155.88

= $311.76

Therefore, the total cost would be:

Total cost = $958. 8 + $311.76

= $1,270.56

3 0
3 years ago
The break-even tax rate between a taxable corporate bond yielding 7 percent and a comparable nontaxable municipal bond yielding
finlep [7]

Answer:D. 0.05 x (l-t*) = 0.07

Explanation: The break even tax rate is the tax rate at which industry players don't find it advantageous or disavantageous to invest in an economy, any tax rate higher than the break even tax rate will cause investors to loss certain amount of profits.

A tax rate below the break even tax rate will cause investors to want to make investment decisions as it will be beneficial and profitable to invest more money into the economy.

Calculation:

7/100=5/100(I-t*),the break even tax rate can be expressed as

=0.07=0.05*(I-t).

7 0
3 years ago
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek
Ann [662]

Answer:

1 Paid rent for May, $5,000.

Dr Rent expense 5,000

    Cr Cash 5,000

3 Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.

Dr Merchandise inventory 36,000

    Cr Accounts payable 36,000

4 Paid freight on purchase of May 3, $600.

Dr Merchandise inventory 600

    Cr Cash 600

6 Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of the merchandise sold was $41,000.

Dr Accounts receivable 68,500

    Cr Sales revenue 68,500

Dr Cost of Merchandise Sold 41,000

    Cr Merchandise inventory 41,000

7 Received $22,300 cash from Halstad Co. on account.

Dr Cash 22,300

    Cr Accounts receivable 22,300

10 Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000.

Dr Cash 54,000

    Cr Sales revenue 54,000

Dr Cost of Merchandise Sold 32,000

    Cr Merchandise inventory 32,000

13 Paid for merchandise purchased on May 3.

Dr Accounts payable 36,000

    Cr Cash 36,000

15 Paid advertising expense for last half of May, $11,000.

Dr Advertising expense 11,000

    Cr Cash 11,000

16 Received cash from sale of May 6.

Dr Cash 67,130

Dr Sales discounts 1,370

    Cr Accounts receivable 68,500

19 Purchased merchandise for cash, $18,700.

Dr Merchandise inventory 18,700

    Cr Cash 18,700

19 Paid $33,450 to Buttons Co. on account.

Dr Accounts payable 33,450

    Cr Cash 33,450

20 Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000.

Dr Sales revenue 13,230

   Cr Cash 13,230

Dr Merchandise inventory 8,000

    Cr Cost of Merchandise Sold 8,000

20 Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,0000. The cost of the merchandise sold was $70,000.

Dr Accounts receivbale 110,000

    Cr Sales revenue 110,000

Dr Cost of Merchandise Sold 70,000

    Cr Merchandise inventory 70,000

21 For the convenience of Cresecent Co., paid freight on sale of May 20, $2,300.

Dr Accounts receivable 2,300

    Cr Cash 2,300

21 Received $42,900 cash from Gee Co. on account.

Dr Cash 42,900

    Cr Accounts receivable 42,900

21 Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.

Dr Merchandise inventory 88,000

    Cr Accounts payable 88,000

24 Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.

Dr Accounts payable 5,000

    Cr Merchandise inventory 5,000

26 Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800.

Dr Sales revenue 7,500

   Cr Cash 7,500

Dr Merchandise inventory 4,800

    Cr Cost of Merchandise Sold 4,800

28 Paid sales salaries of $56,000 and office salaries of $29,000.

Dr Wages expense 85,000

    Cr Cash 85,000

29 Purchased store supplies for cash, $2,400.

Dr Supplies 2,400

    Cr Cash 2,400

30 Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of the merchandise sold was $47,000.

Dr Accounts receivable 78,750

    Cr Sales revenue 78,750

Dr Cost of Merchandise Sold 47,000

    Cr Merchandise inventory 47,000

30 Received cash from sale of May 20 plus freight paid on May 21.

Dr Cash 110,100

Dr Sales discounts 2,200

    Cr Accounts receivable 112,300

31 Paid for purchase of May 21, less return of May 24.

Dr Accounts payable 83,000

    Cr Cash 82,170

    Cr Purchase discounts 830

       

I prepared a general ledger for May in an excel spreadsheet that I attached.

Download pdf
5 0
3 years ago
ROI, Residual Income, and EVA with Different Bases Envision Company has a target return on capital of 12 percent. The following
lara [203]

Answer:

a. ROI = income / Assets      

                                      Book Value       Current Value    

Software Division              0.175              0.13    

Consulting Division           0.164              0.182    

Venture Capital Division   0.093            0.088

<u>Workings:</u>

i. Book value

Software Division = 12,250/70,000=0.175

Consulting Division = 16,400/100,000=0.164  

Venture Capital Division = 56,730/610,000 =0.093

ii. Current value

Software Division = 11,700/90,000=0.13

Consulting Division = 20,020/110,000=0.182

Venture Capital Division= 51,920/ 590,000=0.088

b. Residual income = Income - {Asset x Return on capital 12% }

                                      Book Value       Current Value    

Software Division              3850              900    

Consulting Division           4400              6820    

Venture Capital Division   -16470           -18880

<u>Workings:</u>

i. Book value

Software Division = 12,250-(70,000*12%)=3850

Consulting Division = 16,400-(100,000*12%)=4400  

Venture Capital Division = 56,730-(610,000*12%) =-16470

ii. Current value

Software Division = 11,700-(90,000*12%)=900

Consulting Division = 20,020-(110,000*12%)=6820

Venture Capital Division= 51,920-(590,000*12%)=-18880

c. Economic Value Added ( EVA ) = Net Income After Tax - ( Amount of Capital x Weighted Average Cost of Capital [WACC] )

C.                     Software Division  

                            (Value Base)  

                                    Book            Current

Sales                           100,000          100,000

Income                          12,250           11,700

Assets                           70,000          90,000

Liabilities                      10,000           10,000

Capital invested           60,000          80,000

(Asset - Liabilities)

Tax on Income(30%)     3675            3510

Income after Tax            8,575           8,190

(Income - Tax on

income) (A)

Capital invested             6,000           8,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B)                2,575            190

                       Consulting Division

                            (Value Base)

                                     Book            Current

Sales                         200,000        200,000

Income                        16,400           20,020

Assets                         100,000        110,000

Liabilities                      14,000         14,000

Capital invested           86,000       96,000

(Asset - Liabilities)

Tax on Income(30%)     4920            6006

Income after Tax           11,480           14,014

(Income - Tax on

income) (A)

Capital invested           8,600            9,600

* WACC - 10% ) (B)

EVA (C)=(A)-(B)              2,880            4,414

                     Venture Capital Division

                           (Value Base)

                                   Book            Current

Sales                        800,000       800,000

Income                      56,730          51,920

Assets                       610,000        590,000

Liabilities                    40,000         40,000

Capital invested        570,000        550,000

(Asset - Liabilities)

Tax on Income(30%)    17019          15576

Income after Tax          39,711         36,344

(Income - Tax on

income) (A)

Capital invested           57,000       55,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B)              -17,289       -18,656

8 0
3 years ago
Recently, Epic Electronics borrowed $600,000 from Dinero Finance to secure financing for a planned expansion. Theloan agreement
ValentinkaMS [17]

Answer:

A. Recapitalization

Explanation:

From the option given, the right answer is recapitalization. It was mistakenly written as recospitalization

Collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan.

Collateral is an asset that a lender accepts as security for extending a loan. If the borrower defaults on her loan payments, the lender may seize the collateral and sell it to recoup some or all of his losses. Collateral can take the form of real estate or other kinds of assets, depending on what the loan is used for.

From the options given;

a) Recapitalization is a type of corporate reorganization involving substantial change in a company's capital structure.

b) A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan.

C) Pledged collateral refers to assets that are used to secure a loan.

d) Minority business loans are a source of business funding offered exclusively to minority-owned businesses

From the explanations above, Epic Electronics borrowed $600,000 for expansion which means it's not a minor company if it could borrow that amount of money for expansion. The expansion will bring change in the company's capital structure and they will have to use RECAPITALIZATION as the title due to the purpose of the loan.

5 0
3 years ago
Read 2 more answers
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