Answer:
What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year)
and monthly payments (12 per year)?
Compare the annual cash outflows of the two payments.
- total semiannual payments per year = $2,820.62 x 2 = $5,641.24
- total monthly payments per year = $531.13 x 12 = $6,373.56
Why does the monthly payment plan have less total cash outflow each year?
- The monthly payment has a higher total cash outflow ($6,373.56 higher than $5,641.24), it is not lower. Since the compounding period is shorter, more interest is charged.
What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year)?
- $2,820.62 x 12 payments = $33,847.44 ($25,000 principal and $8,847.44 interests)
Explanation:
cabinet cost $25,000
interest rate 10%
we can use the present value of an annuity formula to determine the monthly payment:
present value = $25,000
PV annuity factor (5%, 12 periods) = 8.86325
payment = PV / annuity factor = $25,000 / 8.8633 = $2,820.62
present value = $25,000
PV annuity factor (0.8333%, 60 periods) = 47.06973
payment = PV / annuity factor = $25,000 / 47.06973 = $531.13
Answer:
d. INTC: 2.36 TXN: 3.43
Explanation:
The property , plant equipment turnover is the ratio of sales divided by the amount of PPE as shown below:
PPE turnover=sales/(beginning PPE+ending PPE)/2
Intel Corporation (INTC):
PPE turnover=$38,826/($15,768+$17,111)/2
PPE turnover=$38,826/$16,439.50
PPE turnover=2.36 times
Texas Instruments (TXN):
PPE turnover=$13,392/( $3,918+$3,899)/2
PPE turnover=$13,392/$3,908.50
PPE turnover=3.43 times
The correct option is D
Answer:
D. A Fed sale of bonds to brokers and banks.
Explanation:
The sale of bonds to banks and brokers is a contractionary open market policy. Its objective is to check inflation by slowing down the rate of economic growth. When the Fed offer bonds to the markets at a higher interests rate, banks will prefer to buy the bonds than lending out money to household and firms.
Producers rely on banks to fund their operations. If they cannot obtains loans for production and growth, their output decreases. A decrease in output results in reduced exports. Low production of US goods means a reduced supply to the international market. It means international buyers will be competing for fewer US products. As the markets compete for the few available products, they push the demand for the dollar up, causing it to appreciate in value.
Answer: Gwen should report a $3,000 long-term capital gain in her income tax return.
In this question the price paid by Gwen’s mother for the shares is irrelevant because of her death.
The stock’s fair market value ($20) when Gwen inherited the shares (21st October 2015) is Gwen stepped up value.
Gwen’s gain from selling the shares is:
Gwen inherited the shares on (21st October 2015) and held the shares until (3rd july 2017), so she held the shares for more than one year after inheriting it. So, she will report a long-term capital gain on her income tax return.
