Answer: $329.75
Explanation:
The one year subscription is $40 per year. It is estimated that the average age of current subscribers is 38 and they will leave on average to 78. This means that they will leave for,
= 78 - 38
= 40 years
Evans Ltd average interest rate on long-term debt is 12% so this means that we can use that 12% as a discount rate for the cash-flow expected.
I have attached a Present Value Interest Factor of an Annuity table to this question. It helps calculate annuities faster.
The above can be treated as an annuity because the $40 is constant every year.
The present value of the $40 over 40 years can be calculated by,
= $40 * present value Interest Factor of an Annuity for 40 years at 12% (look at the table for where 40 years on the y axis intersects with 12% on the x axis)
= $40 * 8.2438 (this is the figure when it is not rounded off to 3 dp)
= $329.752
= $329.75
This shows that the lifetime flat fee of $480 is more profitable for Evans Ltd as opposed to the yearly subscription. They should therefore try to sell more of the lifetime contract with the flat fee.
Answer:
Note: The full question is attached as picture below
(a) (b) (c)
In Larger
Balance Difference column
1. No $725 Debit
2. Yes NA NA
3. Yes NA NA
4. No $225 Credit
5. Yes $684 NA
6. No $45 Credit
Answer:
c. auditors and financial statement users.
Explanation:
This is because, the auditors and the financial statement users tends to have different views on what their responsibilities are. Since their views differs, their tend to be a gap which occurs. <em>This gap is called audit expectation gap. This could be minimized through self regulating auditing of the financial statement before the final auditing by auditors.</em>
Answer:
dividend payment = $6
Explanation:
given data
sell = $65
pay = $65.74
require a return = 8%
solution
we will use here present value formula that is express as
current stock price ( present value ) = 
........................1
$65.74 = 
here d is dividend
solve it we get
d = $6.00
so dividend payment = $6
Answer:
Option (B) is correct.
Explanation:
Sales forecast = 2079 units
Ending Inventory to be maintained:
= 10% of forecast sales
= 10% (2079 units)
= 208 units
Production:
= Sales + Ending Inventory - Beginning Inventory
= 2079 units + 208 units - Nil
= 2,287 units
Taking current inventory into account, Dell's Production of 2,287 units After Adjustment have to be in order to have a 10% reserve of units available for sale.
