Creek Co. uses the percentage of credit sales method in determining its bad debt expense. The following information comes from t
1 answer:
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Answer:
10.24 years
Explanation:
For this question we use the NPER function that is shown on the attachment. Kindly find it below:
Data provided in the question
Present value = $5,000
Future value = $10,000
Rate of interest = 7%
PMT = $0
The formula is shown below:
= NPER(Rate;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the answer would be 10.24 years
Answer:
net wortht -143,280.85
equivalent annual cost $ 24,932.98
Explanation:
We sovle for the present value of each annuity:
<em><u>The first three years:</u></em>
C 31,000.00
time 3
rate 0.08
PV $79,890.0066
<em><u>Then the second phase annuity:</u></em>
C 20,000.00
time 5
rate 0.08
PV $79,854.2007
NOw, we discount this as it is three years into the future
Maturity $79,854.2007
time 3.00
rate 0.08000
PV 63,390.8391
Total net worth:
79,890.0066 - 63,390.8391 = -143,280.85
The EAC will be the annuity which makes the Present work
PV 143,280.85
rate 0.08
time 8
C $ 24,932.983